How does a short sale work? I think I know, but am I correct?

[Jeff Howard]

Here is how I think a short sale works, please let me know if I am correct?   This is based on what a realtor told me when I called about one of their short sale listings.

1. It's in a short sale because the owner can no longer make payments, and cannot sell the house for its full value, but the Bank feels that they can make enough on the house such that short sale is a better business decision than a foreclosure.
2. You get to go see the house, you make an offer.
3. Wait: This can take 9 months to a year, but typically only takes 2-3 months..
1. Note: If in the process of waiting you decide to back out for any reason you can do so by informing your realtor and there are no financial penalties for doing so.
4. Your offer is put in with any other offers and the Bank goes out and determines if it wants to accept your offer or someone else's, or tell everyone to give best and final.
5. Once the bank accepts your offer you post your earnest money.
6. You get to do inspections. Water and Power may or may not be on, and if its not you may or may not have to pay to have it turned on.
7. It works like a typical sale after that, but can take 40-45 days to get through escrow. You can back out and get your earnest money back if your inspector tells you to run or your financing does not come through.
8. You will pay what you agree to and no other hidden fees other than typical buyer closing costs and fees associated with your loan.