I have shown this house. It is very charming yet grand. It is in a great location as far as the Village of Tarrytown is concerned. Tarrytown has great restaurants, cute antique shops, and a great Music Theater. It is about a 15 minute walk from the Tarrytown train station which offers express trains into NYC. It is perched on a bit of a hill, it does have a back yard. What is nice is that you could rent that upper unit out to help pay the mortgage if you didn't need the living space. It would need a bit of work but it is really a neat house.
I wouldn't be concerned about the fact that it is a short sale if you are flexible and have don't have to close within a certain time period. It is something that you can work through. First you have to decide if you like the house.
It has been awhile since I was in the house but if you have any questions please give me a call.