Hi Dolphin, many investors use 85% of ask as their general rule of thumb. So you know a bank has approved $100,000, you could begin at $85,000. Expect the bank to counter. Yes, a cash deal is king.
Keep in mind this advice is only good if the bank has previously approved an offer. List price means nothing as you don't how accurately had been priced. I would have your agent pull comps and maybe offer 85% of median or average, whichever works in your favor.
Also keep in mind, short sales have already usually been deeply discounted. Although you might offer full price of the list price, the bank is still losing a lot of money. So don't be afraid of offering full price. It does not mean you are not getting a good deal. Go by the comps that show value in the neighborhood. The list price mean nothing unless the bank had already approved, then it is one benchmark.