If there's a realtor working with the short seller, then just do your diligence and submit your offer to the agent.
If there's no agent yet you're aware of seller directly, then you'll need to have a third party process the short sale on behalf of the seller.
The process typically follows as such: short sale package is submitted to the lender(s), property is marketed, BPO (broker price opinion) is conducted to relay to the lender the fair market value and condition of the property, an offer is accepted by the lender(s) (or not) and a closing is scheduled accordingly.
There are various pitfalls that can occur along the way, so it's important that the person coordinating the short sale knows what they're doing. As long as you understand the timeframe involved and your offer is sound, you should be in a good place.
I always get a laugh out of the term short sale because they usually take a long time to close. I have had a few that have taken over 8 months but most close sooner. Basically the Bank is allowing the sale to go through and they are willing to receiving less money than is owed on the property. As one of the agent mentioned you have short sales where the bank has agreed to the price and other where they have not. If at all possible you want to deal with one where the bank has agreed to the price. If the bank has approved the price then your closing time will be like a normal and you should close within 60 days or less.
Your agent should always contact the listing agent to find if the bank has approved the price and to make sure that the listing agent is working with the Bank and is knowledgeable in the short sale process. If the agent is not skilled in short sales then this could present problems There are a number of steps that the seller has to go through to obtain approval from the Bank to move forward with the short sale so you want to find out where they are in that process. The sellers agent should be able to tell you where they are in the process and if they cannot then you might want to find another property. Otherwise you might spend months without moving forward. You also want to find out how many lien holders there are and is the price is realistic. Some agents list a property low in the hopes they will get an offer and the bank will respond so they know what it can sell for. You want to have an agent representing you who is familiar with short sales. Ask you agent if they are certified in short sales. It you are looking into a short sale property is pays to have some representing you who is trained and knowledgeable in short sales and who works in the area you are looking in.
Bill Parecki, RS, ABR, E-Pro, RDCPro, SFR, CFA