Answer
That means that the seller may be having some financial issues and needs to get out from under the house. Short sales, not always, but are usually a last ditch effort for a seller to get rid of a home before they walk away from it...but they don't come with the liens that a foreclosure might...so they are much better deals, and can be VERY good deals. The seller has negotiated with the loss litagation department of their lender, that the lender is willing to take less than what is OWED on the property, and that may or may not be tied to market value...every transaction is different. So when you see, "subject to short sale approval" what the seller is letting everyone know, is that the loss litagation department has to approve the offer for the bank to release the mortgage when the transaction is closed. All that means for you, is it may take a few days for a property contract to get completed, but I definiately would do a short-sale purchase any day of the week. However...keep in mind that seller paid closing costs are usually not going to be in the package.