When a homeowner is behind on their payments they may choose to put their home on the market for a price that is less than they own. This is where the term "short sale" comes in.
When placing offers on short sales make sure that you are in first position meaning that your offer is selected by the seller/owner to be submitted to the bank. The owner has to submit an offer to the bank with their documentation to get the short sale approved.
Being in back up position on a short sale means that there is already an offer that has been submitted to the bank and you will only get a chance if the first offer rescinds.
This can be a long process but well worth the wait due to the fact that prices are lower than they have been in years.
It's difficult for me to tell you how to weed out listing agents that know what they're doing, I just know how I interview them when working with a buyer. Working with the wrong listing agent can make or break your short sale deal. I have my own method when interviewing listing agents to Make sure they know what they're doing when negotiating a good price with the bank.
Having to offer current market value is questionable. My opinion is that the deepest discounts can be had with short sales vs. REO properties.
Let me know if I can help you.
The banks are looking for the highest and best offers. Once a seller presents the bank with an accepted offer (one the home owner has accepted) the bank can then approve the short sale, counter the offer or reject the offer. The bank should be dealing with one accepted offer at a time, but every situation is different and banks seem to not be playing by the rules lately.
The process can take awhile to get an answer back from the bank. If your offer was countered by the bank you would still be in the running. If the offer is rejected, then there may very well be another offer on the table by someone else. You would have to check with the listing agent to see if they are working with another offer at that time. If they are, then you would have to wait to see how that offer plays out. If not then you can resubmit a new offer. This is part of the reason why the process takes a long time. Another reason is that the banks don't have enough people to process short sales so you have to be patient.
The best thing to do is make your offer the best you can right from the start. A short sale is a bit different to pursue than a regular transaction. Just because the seller accepts your offer doesn't mean that you have a deal. The bank has the final approval. What may look good to the seller may not look good to the bank. If you are in a hurry or pressed for time, a short sale may not be the way to go. If you have time, it could be worth the wait. Best of luck.