Banks look for the highest offer / best qualified contracts.
The bank usually either says yes, or no and typically there is no counter offer.
Depending on the attorney representing the seller and THEIR practices, decides wether or not you are informed of the descision of yes or no.. or if they accept your offer. My experience is that is if the attorney representing the seller (bank) is prepared to handle the transaction and communication all can go smooth. If the attorneys office is not prepared or uninterested ( as I find most to be) then the deal will just go to the first person that makes an acceptable offer.
Short sales most definately are a good deal... it is a tiring drawn out process, but if you have a good agent that knows how to handle a short sale all can go bumpy smooth. I have seen numerous homes go for 25 -30% off market value.
Find a Realtor that has knowledge.. experience knowledge.. (not late night TV you can buy a home for $300. knowledge) of short sales and the transaction will hav a better shot at surviving.