The main difference with a short sale is that it is contingent on bank approval. The bank or banks (there may be more than one lien) have to agree to be "shorted" the money they are owed by the seller. Two or more banks always makes the process more complicated.
An offer on a short sale is made the same as an offer on any property. The difference is an addendum should be done to put a deadline on the process. "I'll give the bank 2 months to reply to my offer". If the two months pass you, the buyer, can then continue to wait or terminate and place an offer on a different property.
When you place an offer on a short sale property, the seller may agree to your offer and place the property under agreement. That offer then gets sent over to the bank for review and approval.
At the same time, the seller must provide a letter of hardship (why should the bank forgive the difference in what is owed) and provide bank account statements and tax returns. The seller must cooperate and provide the required documents or the process will go nowhere.
The bank will order an appraisal to find out what the home is worth. They aren't going to allow a home worth $300,000 to be sold for $150,000.
After the bank reviews everything (which may take months), they will decide whether or not to accept your offer and "approve the short sale".
There are some major downfalls to a short sale:
1) It may take months to get a reply from the bank on whether or not they will accept your offer.
2) After waiting months, the bank may counter your offer with terms not acceptable to you.
3) The home is sold as-is. You can get inspections but the seller doesn't have the money for repairs and the bank won't pay for any repairs.
4) At any point, the seller may become uncooperative, decide to declare bankruptcy, or the home gets foreclosed on and the deal will fall apart.
I typically warn buyers that if they wish to put an offer on a short sale property it should be one that they totally love and REALLY want.
I hope this is of some help.
Prudential Patt White Real Estate
Lehigh Valley, PA