Short sales are about a quarter of the sales lately in Lake Orion and Oxford Michigan. So unless you are in a hurry to close on a new house, you will more than likely be looking at short sale listings- they are becoming very difficult to ignore.
Remember- the seller walks with nothing but bad credit. If the listing agent did his/her job the seller will be protected from future lawsuit from their lien holder(s). Sometimes the threat of a future lawsuit will just be waived by the lien holders, but often times the seller has to pay for that piece of mind.
Usually the second mortgage is the problem when it comes to obtaining a deficiency judgement in the future. I've had sellers who had this threat negotiated away by setting up a zero interest payment plan for a portion of the outstanding debt (usually about 10%) and I've had sellers bring money to the closing.
So this brings us to buyer tip #2! Don't ask for personal property in the purchase agreement. More than likely you are going to get the house at a great price. You might even be willing to pay more for the house than you're getting it for. So if you want the seller's appliances or boat or lawn tractor, etc. offer to buy them outside of the real estate sale. There's a good chance the seller will need that money to buy a waiver of liability for the deficiency. Since appliances/boats/lawn tractors are not real estate, they do not need to be part of the purchase agreement. And the cash the seller will be getting may be the difference between the seller approving the short sale conditions or rejecting them and allowing the house to go into foreclosure.