We instruct our clients to do that not always true the bank could accept your offer while you are waiting around for weeks, months, and etc.
Some short sales are putting in penalty clauses if the buyer backs out within 60 days regardless of whether the seller's lender has accepted or even responded. That would typically keep many buyers from putting in multiple offers simultaneously!
The short answer is yes, but you have to disclose it. Unfortunately, not even most buyer's agent understand the law behind it and can actually be putting their clients in legal jeopardy by advising them incorrectly.
I've actually already blogged the long answer to this question if you're interested you can view it at: http://www.brianbrumpton.com/blog/?p=15.
Work with an agent who holds a CDPE (Certified Distressed Property Expert) or SFR (Short Sale and Foreclosure Resource) designation, commit to one short sale home and see that contract through. There is SO much bad advice happening out there in regard to short sales.
Everybody has heard a short sale horror story - and they love sharing their experience. The reality is that it doesn't have to be that way and a lot has improved in the processing of short sales in the last year. We're not done working out way through these distressed property sales. It's a complicated process and is not for every buyer or every agent. My fastest short sale last year was 30 days. My longest was four months. And, there were many along the way where the buyer's patience ran out before the short sale process could be completed.
FYI - in a short sale, the contract is between buyer and seller. The bank reviews the contract and is the deciding authority on whether a short sale is acceptable or not (based on a lot of factors), but the contract is still between buyer and seller.
Have a blessed day!