Gene, there are two situations when I believe buying a short sale makes sense. First, if the sellers are still living in the home and trying to make the best of a bad financial situation, they usually have taken care of the home. Secondly, if you LOVE to fix up distressed homes, a short sale may be for you if it is vacant. In this second situation, the owners often strip the house of anything "strippable" leaving a mess . . . but it is priced accordingly and your sweat equity can quickly increase the value of the property. In both situations, it takes time to close a short sale (3+ months) unless you are a cash buyer and working with one of the banks that is anxious to get it off their books. I recently closed 2 short sales, representing the buyers, in 4 months each. In both instances, the sellers were still occupying the homes and they were in good shape, giving the buyers good value for the prices they paid.
Hope this helps!