What does a 'short sale' indicate in real estate?

A 'short sale' in real estate refers specifically to a situation in which the proceeds from the sale of a property are less than the amount owed on the mortgage. This typically occurs when a homeowner is unable to continue making mortgage payments and seeks to sell the property for less than the amount remaining on their loan. In such cases, the lender must agree to accept the lower amount, which can allow the seller to avoid foreclosure and settle their mortgage obligations more amicably.

This definition underscores why the chosen answer correctly encapsulates the essence of a short sale. The reality of a short sale points to the need for the bank's approval and often involves negotiations about the difference owed. The other options do not accurately represent this crucial aspect: equal proceeds do not reflect a short sale scenario; quick sales don't necessarily imply no profit; and while agents can be involved or not, this does not define the fundamental nature of a short sale.