To add to the conversation, remember that a short sale is usually sold at "fair market value", meaning that the lien holder(s) send someone out to do a market analysis to establish CURRENT market value. You are really not getting the house at a "bargain" price, you are getting a home where the lien holders are willing to take less than they are owed. EG: Owner owes $200,000, fair market value is established at $150,000....bank agress to get paid only $150,000 and take a "SHORTage" on the $50,000.
Add to the mix that 99% of these sales are "as is", meaning that you can do a home inspection, (and pay for it) but the neither the seller or the bank will do any repairs. Many of these types of sales also require the buyer to pay for and obtain the necessary paperwork from the township ( Certificate of occupancy if town requires one, and fire certification) AND pay for any repairs needed to obtain either certificate.
I wrote a blog about the process, so here's the link.
Read it thoroughly, a short sale is NOT for someone with no patience, has to move in a speciic time frame, and/or doesn't have additional funds to do repairs etc to get the CO and fire certification.
if it stuill seems feasable to you, get yourself a buyers agent (NOT the listing agent) who is SFR certified (Short Sale and Foreclosure Resource certified) so they can do all the things Leonard mentioned.
Talk to a good REALTORÂ® in your area about the pros- and cons- of short sales so you go into a short sale with your eyes open. Ask him/her to find out who the lien holder is, and whether there's a 2nd mortgage as well. If there's just one lien holder, make sure you have the patience to WAIT a long time for a response. Ask who will be communicating with the lien holder, and how often. Ask if a 3rd party short sale expert will be involved, and if so, what their success rate has been.
Note: If there are 2 (or more) lien holders, 95% of the time (or more) the short sale won't be successful.