Hello Nick. Your question calls for several answers. First of all, in a short sale, the seller asks the lender(s) to take less than what is owed on the property. That's why it's called short sale. One of the things the lenders take into consideration when making a decision is the seller's overall financial situation. While the seller does not have to be insolvent, the seller cannot offer to pay for things such as repairs, closing costs, removal of hazardous waste, etc. Since the seller does not have money to bring to the table, it is possible that the short sale will only be successful if you agree as part of the contract to pay for certain outstanding house related debts such as tax liens, mechanic's liens. In the end, the closing agent or attorney cannot settle the sale or close escrow unless there is enough money brought to the table to satisfy all the liens.
I am not sure that I understand your last question regarding you putting a lien on the house and have ownership of it because of the lien. I am not sure why you'd be able to put a lien on the house and how you'd be able to get ownership of the hosue because of the lien. Can you explain your thinking.
Lastly, but not least. The undergroung oil tank would concern me as I don't think you can just dig it up yourself. An inground oil tank is considered hazardous waste because of the potential of discovering an oil leak. If an oil leak is discovered, you as the new owner can be responsible for the hazardous waste cleanup. I would under no circumstances agree to dig up the oil tank before the close of escrow and I would be extremely cautious about buying a property that has an inground oil tank without knowing for sure that there's no leak. You said you'd have to pay to dig up the oil tank if necessary. Who will determine whether it's necessary?