My basic problem with short sales is likelihood of you actually closing escrow and taking possession. The math stats are rather dismal. In April, the experts were telling me that only 6% of the short sales actually closed escrow. That means that over 9 out of ten don't.
Now lets add another less discussed factor. Most aggressively priced short sales have multiple offers presented to the bank. Thus, your offer will be considered against several others. If you are paying cash or have a conventional loan, you may be favored over someone asking for down-payment assistance or using an FHA loan product.
When you factor in multiples offers, the potential of your purchase offer being selected by the bank erodes the likelihood of you purchasing a short sale to far less than 6%. One analytics guy I talked with ran some numbers and concluded that any single offer has a 2-3% chance of success.
So... it is not impossible, yet keep in mind that you may want to continue your search while the banks do their thing.
I understand your concerns. VHB_S mentioned As-Is, & the need for an inspection. This is true but also true for the lender owned home or "REO" homes. You will be required to sign 2 documents; and As-Is Addendum & a Short Sale Addendum releasing the seller or Lennder of any liability for issues with the property should they be discovered. You can acquire copies of these documents to review from your agent or by visiting any agency office. Read them carefully so you understand what you are agreeing to accept. The problem with Short Sales is that each lending institution handles them differently so any general comments may not apply. Once the seller & buyer have both agreed on an offer the bank must also agree. The asset manager handeling the offer may change due to high turn over in that position-it is a minimum wage job with a lot of pressure- this only slows the process down. So, in closing, read all the materials carefully, get an inspection, & above all, be patient. If it is the house you really want, you will wait.
I've written several articles about short sales on my blog:
I wish you the best of luck with your home purchase.