Short sales are painful. I recently closed on my first one heres what I can share.
1.) There didnt appear to be any benefit to offering cash and taking as is. Made no difference in the price they would consider...
2.) Basically your dealing with an asset manager several states away that only sees the final value on the Hud-1 form. He is going to try repeatedly to get the highest amount possible. Dont be surprised if he tries to take the 3 offers in front of yours before accepting yours to make 300$ extra... I mean its silly really.
3.) PATIENCE PATIENCE PATIENCE PATIENCE PATIENCE : This process is absurdly long on a good day.(5-6 months) and if its a long short sale, well.... there are people from 2009 still waiting to hear back from an asset manager....
4.) "Its in bad shape, will they lower the price?" NO! . They ordered a Broker Price Opinion and they will not lower the price for you no matter what your find... Refer to "2" , the asset manager is trying to get as much as possible.
5.) The asset manager negotiates more than you do. Youll be at your top $ and they will kick back to you with a value that is only 3,000 $ higher, and youll think, "what the hell, I dont want to wait another month for them to counter, lets accept and close this" - NO advise, but I fell into this trap. In Hindsight, I believe I would have been better off walking away.
So in summary, I wish you the best of luck, however I dont plan to buy another shortsale for a while, not all cash anyway... I WILL NEVER make another all cash offer on a short sale.
Hope I helped..
Edit*
One last piece of advise, does the person trying to shortsale Have PMI? If someone has PMI the bank will make 0 effort to make a short sale work...