I got some good stuff from Chris McLaughlin (shortsalesriches.com) on what to avoid with short sales (see below). If you're wondering what a short sale is, just Google it. You'll find more than you care to know. But basically, it's when a homeowner is trying to sell their home (often in an attempt to avoid foreclosure) and the net proceeds from the sale will not be enough to pay-off their mortgage (i.e. there's a deficit). So, they are going to ask their mortgage bank's permission to sell the home "short" of what's owed. Why would their bank agree to this? Because it's often cheaper for them to take a loss on a short sale rather than risk a bigger one in foreclosure. So, they might sell it a little below market... if any/all offers are too far below market, the bank will just make plans to foreclose. The upside of a short sale for a Seller is that they typically get out without a foreclosure on their credit. Also, the banks typically agree not to come after sellers for damages/deficiencies if you have a good agent helping (i.e. when you get foreclosed on, the bank can still sue for their loss). The upside for a Buyer is that they can sometimes get a good deal on a property (i.e. buy it a little below market). However, the downside for everyone is the extended time it takes to get a short sale approved (often weeks or months). So, when dealing with a short sale, avoid these:
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Badgering. Let's face it, nobody likes to be badgered. Yes, you might be excited by submitting your first short sale offer but resist the urge to call too often or otherwise badger overworked staff. Maintain regular contact and put a system into place. [this refers to you calling your agent, your agent calling the Seller's agent, or the Seller's agent calling the bank. Patience is key in a short sale]

How Low Can You Go---Not that Low! While lowball offers are expected, don't waste everyone's time by submitting something excessively below the current market value. Keep it realistic and plan to justify the reasons why you think the offer is fair.

Requesting Repairs or Refunds. Although there are exceptions to every rule, short sales are sold 'as-is'. The price should reflect needed repairs - including time and labor. Don't expect the bank, lender or current homeowner to fix or repair anything. Problems that arise after the sale are also your problem so be sure to add in a bit of wiggle room especially if the homeowner plans to occupy the house for some time during or after the sale.

Bad Credit. Yes, they will look. Get your own finances in order and make a point of presenting them in the best light possible.

Threats. Threatening to walk away from a deal, sue or other tactics rarely result in anything more than frustration for everyone involved. Unless a gross degree of misconduct was perpetuate against you related to a federal issues such as discrimination or other similar point, regular day to day mishaps are part of learning how to play the game. It's essential to have a tried and true system in place that maximizes profit while minimizing time.

Homeowners with Assets. Homeowners have to demonstrate their need an inability to pay before a lender will agree to take a major loss. If your homeowner has other assets that could be turned into cash or compensate the lender for a loss then there is a high likelihood your offer will be rejected. Do your homework before blaming the bank - make sure the deal is win-win for all involved or you will likely just waste everyone's time.
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I'll add to that list:

Vacant FHA homes. Homeowners that financed their home with an FHA loan cannot move-out before the short sale is approved or it is automatically disqualified from a short sale.

Being in a hurry. If you have a lease that's expiring in the next few months, or you have another reason why you might have deadlines in your home buying process, then short sales aren't for you. I've seen a short sale approved in a couple of weeks, but more often it's a month or more. And that's just to get the approval... it then generally takes another 30 days or so to close. However, you might not get the approval, or the home might foreclose while you're waiting and, after waiting a month or two, you're back at square one looking for another home.

I hope that info. helps... let me know if you have short sale questions I can help answer.

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