What characterizes a short sale in real estate?

A short sale in real estate is characterized as a sale of property in which the proceeds are less than the amount owed on the mortgage. This situation arises when a homeowner is unable to meet their mortgage obligations and seeks to sell the property, but the market value has declined to a point where the selling price won't cover the outstanding mortgage balance.

In these scenarios, the lender typically agrees to accept a reduced amount from the sale as a way to avoid the lengthy and costly foreclosure process. The decision to approve a short sale is often influenced by the lender’s evaluation of the borrower's financial situation and the current market conditions.

The other options do not accurately reflect the definition of a short sale. Selling for more than what is owed describes a traditional sale rather than a short sale, and a sale after foreclosure indicates that the property is already under the lender's ownership, which is not applicable to short sales. Lastly, while multiple offers can occur in the real estate market, this does not specifically relate to the concept of a short sale. Therefore, option C correctly captures the essence of what characterizes a short sale in real estate.