If you're eyeing a home that's a potential short sale, be prepared to be in the home buying market for the long haul. Short sales can be more time consuming than traditional home sales, but if you're in a position where you can be flexible with your close date, your patience could well be worth the wait. Homebuyers may find the opportunity to potentially buy a home at a reduced price appealing.
A short sale means that the seller has negotiated - or intends to negotiate - with their lender to pay off their existing mortgage for less than what they owe on the home. This is different from a foreclosed home, where the homebuyer has defaulted on the loan and the lender already owns the property. With a short sale, you are negotiating with not just the seller but also the lender; even if the seller accepts your offer, the lender may not.
Keep in mind that it's important to work with a real estate professional that is experienced in short sale transactions. An experienced real estate agent can help expedite the process and protect your interests as a home buyer.