I would agree with Travis on the Appraisal point. Even if you pay cash you should always have the home appraised during your inspection period and when you do, make sure the appraiser does a "forecasted" market trend valuation that will help indicate if the surrounding home values are rising or falling. the deal on the home may look good now, but if values fall you might be thinking you made the wrong decision to buy at this time.
The use of Cash does not necessarily make an offer look inviting to a seller just because there is no lender involved and they see "green".
Most foreclosure home offers when made "cash" are nearly always assumed to be made by an "investor". The problem with this is that if you intend to occupy the home as a private party you will have to fit a certain criteria for your offer. For example, the distance from the home you are trying to buy with some lenders requires you live greater than 50 miles from the purchase property. Otherwise your purchase is considered a 2nd home purchase when using cash and HUD, Fannie and Freddy have put a limitation on the sale of a foreclosed home as "only offers from primary residents will be considered in the 1st 10-15 days. You see how this can get complex?
Short sales most of the time are good to go. The bank only really is interested in the "net" amount they will have remaining.
The REAL advantage in presenting a CASH offer to purchase however is "the time to close" If you do present an offer to a seller or Foreclosure, being able to close with 10 days to 2 weeks is big.
I hope this provides you with some insight and I wish you well with your home purchase endeavors.
Always Work with An Experienced Realtor
Stew Keene - Professional Realtor
Certified Shoer Sale Negotiator