Buyers and their real estate agents are definitely looking at each other and trying to answer this question, and it's not an easy one to figure out... should you go for a short sale?
One thing we know for sure, short sales are a very different type of real estate transaction than "normal" sales. A short sale means that the seller owes the bank more than what he/she is asking for the property, so even if a buyer offers to pay full asking price, there is a short fall that the seller and his/her bank must negotiate.
To say the buyer has to have patience in this type of transaction doesn't even begin to capture it. The wait can be months and months, and meanwhile, other good deals come and go, and the summer season comes and goes, and you still don't even know if you're going to be able to buy that house.
And sometimes, the answer from the bank is ultimately "no" - they can't work out a deal with the seller to accept the short sale, and end eventually going to foreclosure.
But, short sales *can* work, and can get you a very good price for the property, usually a little less than market value.
And, not all short sales are created equal. Here's what I am seeing as some general factors or traits to look for, and/or to be wary of:
Find out if the listing agent is trained and experienced in working with short sales. If they aren't, it's almost a guarantee that the seller will not be experienced, either, and the combination can spell disaster. There is so much paperwork and followup to be done on the seller side that the agent really needs to know how to help them put together a short sale packet for the bank, and ensure it gets where it is supposed to go, or it's a non-starter.
Find out if the seller is willing to work on the short sale, and has his/her packet started already. If they don't, you've potentially got another non-starter.
Find out how *many* mortgages there are on the property. One is the best situation, by far, two means you have at least double the effort to get the short sale through. Again, it's doable, with an experienced agent and a very determined seller, but you'll need to set aside even *more* time to be patient as a buyer.
Not for the faint of heart, but definitely worth a try if it is *the* property you want, none of the warning flags above are waving, you've got loads of patience, and are prepared to have the answer be "no" at the end of all your patience....!