In a short sale, what must occur regarding the mortgage?

In a short sale, the key factor is that the lender must agree to accept a sale price that is less than the total amount owed on the mortgage. This means that the borrower is unable to make the full mortgage payments and is seeking to sell the property at a lower price to avoid foreclosure. The lender’s approval is crucial because they need to agree to forgive the remaining balance owed after the property is sold for less than the mortgage amount. This process typically involves the lender evaluating the sale offer, the homeowner's financial circumstances, and the market conditions.

The other choices do not align with the fundamental aspect of a short sale. The requirement for the mortgage to be fully paid off contradicts the definition of a short sale, where it specifically involves a sale for less than what is owed. Similarly, the market value exceeding the mortgage amount and the stipulation about the buyer being a first-time homebuyer are not conditions dictated by the process of a short sale. Thus, the correct answer highlights the necessity of lender approval for the sale to facilitate a completion that mitigates financial strain for the current homeowner while allowing the property to transfer ownership.