When I read "Potential short sale" in the listing remarks I usually assume one of two things: 

     A.  The seller has not talked to their lender. 

     B.  The seller is talking to their lender or has hired a 3rd party to negotiate the short sale for them.

In either case, the lender has not "Approved" the seller's Short Sale request.

This is a red flag to me as I can spend a lot of time showing such listings and writing purchase offers that are likely not going to conclude with a successful closing.

The seller's hardship is the root cause so we can also assume the HOA Association Fees, taxes, and utilities are in arrears too.

     Question # 1:

     Who pays all these past due bills at the closing? 

     Question # 2:

     Buyer submits an offer and is waiting to hear if the lender is going to approve it or not.  In the meantime, the seller still has the keys to the property and decides to remove the appliances, ceiling fans, etc. and sell them to make a little money or to get a little anger management satisfaction towards the lender.

     During the walk-through the buyer discovers this indiscretion and goes to the closing requesting their escrow money be refunded posthaste.

     What is NAR's and our respective state's Department of Professional Regulation's official position on this situation? 

For all those experienced in short sales this forum would be an excellent place for you to share your experience on these questions and many more that I have not included in this post.