The short sale is quickly becoming the norm for real estate transactions.  Unfortunately, that doesn’t mean that there are standardized forms and procedures.  Every lender has its own set of standards, forms, and guidelines. However, one can expect the seller of a short sale and the sellers’ listing agent to provide: tax form T4506, hardship letter, listing agreement, sales agreement, 2 years tax returns, 2 months most recent pay checks, a copy of a utility bill, two months most recent bank accounts, an account of assets and liabilities, a monthly budget, arms length transaction statement and a  Dodd-Frank form.  This will get you started.
The selling agent must also be prepared to provide more detailed information about their buyers than usual. For example: social security numbers, pre-qual letter, and proof of funds, current address, and an arms length transaction statement that is specific to the seller’s lender.
Once all this data is collected and submitted to  the first mortgage holder and the second mortgage holder then negotiation begins.
The first usually offers to pay the second a nominal amount. The second either accepts, or rejects and perhaps counters. Sounds simple but it may take weeks to come to an agreement….or not.
Only 3 of 5 short sales actually are successful at this time. (Is the glass half empty or half full?)  Its best to prepare for the worst case. Your seller should be packing for a move one way or the other.
If a short sale lender  is using a 3rd party transaction site like Equator.com then the process might be a little easier. Agents have many complaints about the system, but its probably the best that is available.  Bank of America,  Chase and Nationstar all use Equator with more lenders expected to join in the future.
You can expect to take about 60-90 days on average for the short sale process. That’s about twice as long as a regular non short sale.
Sellers shouldn’t accept offers that are too far below the current market as the lenders that hold the mortgages do order evaluations and will reject short sales that are significantly below the market.  Many investors are making multiple offers with the expectation of being rejected and are very happy when an offer they didn’t expect to be successful is accepted. Most of the time the offer is not accepted and the seller has lost valuable time on an unrealistic offer.
Buyers and sellers should realize that today’s real estate professionals are working twice as hard for half as much under much less than ideal situations. 
Patience is the key.  If your a seller, always consult with an attorney and a professional tax consultant. The Realtor does not have the expertise to answer legal or tax questions.
(Rick Dillion serves Solano, Napa and Contra Costa counties.)
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Would you like to add automatic deposits of several hundred dollars to your checking account on a regular basis?  Everyone would answer”  Yes, but what’s the catch?”  Well before I tell you that, what if you also received interest write-offs on your taxes.  You can also depreciate the source of this income.  However, the value of the source of the income is likely to increase in value over time.  So what’s the catch? You have to make an investment just like any business.  You have to manage the investment or have someone manage the investment for you. How much do I have to invest you may ask?  What will it cost me you may ask?  The question is perhaps not what if will cost, but HOW MUCH AM I GOING TO MAKE?  If you invest $28,000 (20% down) on a $150,000 single-family home in today’s real estate market, your payment would be around $800 a month and the rent you collect each month could be as much as $1500 in some markets which would produce a POSITIVE INCOME of $700 per month. A simplified net ooperating cost would use 8% or $120 or management fees and for a one-month vacancy factor of $66 ($800/12) and you would still get a positive cash flow of more than $500 a month for long as you own the property !.  So the question now is when will I get my investment back? Simply divide $28,000 by $6000 which is a little over four years and less than five years. 
Now compare that with other investment opportunities.  All have risk. Returns will vary and you could even lose money. You could make a return that would be so low, that at best, you would hope to beat the inflation rate .  Yes, you could buy that lucky stock on the start up, but the odds are against it.
How can you get started?  All you have to do is call a Realtor.