Short Sale-mania

The BUZZ word for the time being is SHORT-SALE!
What does that mean to you as a Buyer? Well ... it conjurs up the image of being able to get the bargain price on a home that you target while house hunting for these listings. Are deals out there? Yes ... BUT ... remember those old words "Caveat Emptor" - let the "Buyer Beware"! Now that the cat is out of the bag and you realize that deals may be available, you need to know the real world impact of this type of undertaking.
If you are targeting Homes that are listed as Short Sales ... then you need to take into account that your deal will not run along the lines of a standard purchase. Short Sales require 3rd Party approval. Depending upon the lien(s) that might exist on the property, such as 1st and/or 2nd mortgage, home equity line of credit, tax lien, etc..., there may be substantial delays in acquiring this type of home. The 3rd Party approval is undertaken by a Bank or other interest that may have a lien against the property and as such, they have the final approval in accepting the contract that may have already been accepted by the current owner.
In many cases, once the contract is accepted there is a substantial burden to deliver the purchase financing to settlement within a matter of days or weeks ... with substantial per diem penalties or fees against the Buyer if that is not accomplished. So again, Buyer Beware! If you want to undertake this approach to buying a Home, make sure that you work closely with your Realtor and your Lender to ensure that everyone is able to satisfy the terms of your contract in a timely manner.
First things first ... work with a Realtor who has experience in these matters and cannot only negotiate the best price and terms for you - but also is able to set realistic expectations with the other parties involved and deliver upon them. There is a LOT that is required of your Realtor including the development of a relationship with the Listing Agent to ensure a swift and smooth transaction.
Secondly, make sure that you are positioned to make formal application on the purchase with your Lender and be prepared to execute upon the Home Inspection, Appraisal and other expenses in lieu of the 3rd Party approval - because - once that approval is provided, they will demand a rapid settlement. Obviously, you cannot sit back without being proactive to ensure that you settle to satisfy the Bank/Seller and although it may cost money up front for these services - it is money well spent to make sure you satisfy your contract by settling on time.