Generally, a short sale allows a home owner to work with their mortgage company to settle for less than what they owe. When their mortgage company is willing to work with the owner, they will sell the house for less than its current value ('short' of its market price).
Remember, when there are multiple offers, you could be in a spot where you may have to bid higher that what you originally started off with. Short sales used to take a very long time to close a few years back, so be patient with the process.
REALM Real Estate Professionals