Your profile says that you are a home buyer. Looking at the link below, Trulia reports that there recently have been 250 foreclosures and about an equal number of homes on the market and homes sold.
Some things that you should know:
It is less expensive for a lender to sell a property short than to foreclose. When a borrower is going to default on their mortgage, the lender will contact the borrower when they are late on their first payment and try to find out what the situation is. Given the weak economy lenders are very attentive to borrowers that make either late payments or miss a payment, and in many cases, if the borrower is in trouble financially, the borrower simply walks away from the property and the lender never hears a word from them.
Because of the number of foreclosures (250 according to Trulia), that probably means that lenders in your area are trying to AVOID a home going into foreclosure, so they WANT to have a seller in trouble sell it BEFORE they have to foreclose.
Typically that means that a short sale home probably has "deferred maintenance", meaning peeling paint, weeds in the yard, dead grass, and probably some items that need repair. Depending upon the lender's policies they may or may not be willing to pay for any repairs. Many short sales are sold "as is".
When a borrower approaches their lender for a short sale, the lender will require the borrower to prove the reason that they can no longer pay the mortgage, ask for financial statements, a letter describing what happened, etc. Then the lender can decide if they would rather have the borrower sell short, or foreclose.
From your perspective, you need to know if the short sale has been approved. Some lenders review the evidence submitted by the borrower, and will issue an approval for a certain price. Other lenders will say "we will issue an approval once you bring an offer". Sometimes obtaining approval can take one day, some times months. It depends on the lenders. Sometimes there is more than one lender, and this complicates things big time. Many people purchased homes with "no money down" and have both a "first mortgage", the primary and larger mortgage, and a "second" which is typically smaller, around 10-20% of the first loan.
From your end the problem can be if the "first" and "second" cannot agree on a settlement. Normally, because the "first" is in "first position", that means that they are first in line for proceeds from the sale. The "second" is junior, and normally they have to settle for a small fraction of what they are owed, usually around 10-20%.
So a home with a $200,000 mortgage probably has a first of $160,000 (80% of the home value), the second is $40,000 (20% of the home's value). When it's time to sell, the first pays the closing costs (title, escrow fees, transfer fees, probably back taxes, the real estate commissions, attorney fees, etc.) So if the home is now selling for $120,000, both lenders are going to lose money. The first lender, after paying the fees, might have to write off $10,000 in closing costs, pay the second $$5,000, leaving them with $105,000.
But sometimes the second wants more than the first will allow, and then things get really complicated. On top of that, sometimes there are other liens on the property, like a mechanic's lien if the home owner had some work done on the house, then failed to pay. All of the liens need to be removed before the title can transfer.
For you, you need to understand (make sure that your Realtor finds out) exactly what the circumstances are:
1. Is the short sale approved by all lienholders? At what price?
2. How much are the lienholders losing (sometimes if there is a really large loss they will simply foreclose)
3. If the approved sale price close to market value?
4. Many lenders, once they give the ok, want you to be able to close in 30 days, so make sure that your Realtor and your lender understand the requirements. I have had very bad experiences with buyers that do not have their act together and asking for a time extension in a short sale is NOT a good idea.
Sorry this is so long, good luck.