The short answer is "sometimes". Many people hear the words "short sale" and instinctively think of a seller that is in financial trouble and needs to sell their house quickly to avert further financial problems. This is occasionally the case and can be an opportunity for a buyer to cash in on another's misfortune. In contrast, a lender may consider a short sale even if the seller is current with their mortgage, but property values have fallen. In these instances the reduced price may in fact be consistent with true market values rather than below.