I can't help but ask if this "10% cash at closing" has been written into the contract or is this a verbal request? I concur with others in that the seller cannot get receive a dime on a short sale which is why I am asking if this is in the contract or verbally? I want to know if the bank is aware that he is seeking this 10% and if so, have they approved and accepted the contract? If you do not agree on the 10% will the seller accept your offer (obviously still pending bank approval). As I am sure you are aware, a seller signing off on a short sale contract is nothing until the bank approves it.
As far as inspection, I would most certainly get a home inspection done. Obvious repairs you will have noted by visiting the property yourself, such as cracked stairs, driveway repairs, paint chippings, etc. but you need a home inspector to point at more serious issues, should any be present. I'm sure you are also aware that short sales are typically sold as is and the bank typically won't make any of the repairs (unless required to by the town should not the town not issue a temporary CO which is comon in some Morris County towns). The seller usually says they have no money and are not going to sink any additional money in a home that they are not making a profit on.
Good luck and do not agree to handing the seller 10% cash back "under the table" at or after closing.
Prudential New Jersey Properties
Livingston Regional Office
973-992-6363 ext 116 office