The house is listed at $500,000 & the owner owes to 1 or more banks, $1,000,000.
Be for you make an offer on this short sale home, you need to find out if any of the loans are cashed out Equity loans. If there are equity loans YOU could be the one paying as much as 10-20% of the current balance in order to get the lender to release the lien as paid in full for the seller. Sellers usually do not have the means to contribute towards these payoffs or the 1st lien holder won't allow it.
I don't look back on this same Trulia posting for answers after mine.
Emily S. Knell
Realtor Since 1996
Realty ONE Group
Short Sale Listing Agent
100% Success Rate in CA