Not necessarily. I have closed short sales where the homeowners never missed payments. It's possible. It really depends on your situation, the lender and the investor on your loan. Your best bet is to speak to a local real estate agent that has plenty of short sale experience.
you will have to have some kind of hardship usually for bank to approve a short sale best thing to do is talk to them and make them aware of your situation . there are options these days to shortsale if you want to stay in your home. I CAN'T STRESS THIS ENOUGH TALK TO YOUR LENDER . THEY DON'T WANT TO FORCLOSE ON YOUR HOME.
Absolutely not. If you can keep paying your mortgage you should. Now banks will still consider you for a short sale. Also you could qualify for a loan modification and your credit will not be damaged as severely.