Sometimes your lender will give you a credit for the next appraisal, but you'll have to talk to them about that.
If a listing says 'short sale approved' here, i don't assume that anything is written in stone - i just assume that the seller has received approval to participate in a short sale.
My opinion is, the inspection should be completed at the beginning. Even from the buyer's perspective, I would rather be out inspection money rather than wait 3-4 months, have the inspection, only to find out their is a material defect that causes dissatisfaction.
In today's market, I would not want to wait 3-4 months to get back into the market if I were a buyer. Rates and prices are subject to change. So, why add more risk to the equation.
Again, we donâ€™t know the details of your specific situation.
Talk to your agent about the wisdom and risk of having the inspection done. Perhaps a chat with his broker is also needed. If the agent and broker expect to eventually earn a commission for helping you to buy a house, maybe they need to step up andâ€¦
As mentioned, short sales do lend risk of money spent without certainty that the price or seller will be approved for the short sale. There are just more factors involved in this type of transaction. Buyers, in most cases, pay for an inspection and that contingency satisfied. Some buyers do not have the home appraised until the seller has provided notice that the short sale has been approved. However, depending on the type of financing, delaying the order of the appraisal may not be possible since the time frame to close a short sale once it is approved.
One final note, you did not indicate if your inability to increase your offer was presented to the seller's lender. Before seeking to recoup fees, be sure that your position has been presented in hopes your original offer could be approved.
Best of Luck in resolving your situation.
I won't comment on the rest of your question, as it is up to you and the agent how you all want to handle that, if at all. There is always a risk in pursuing a short sale including out-of-pocket expenses. Hopefully you can get it resolved.