When getting ready to put an offer in on the home of your dreams, you need to have as much information at your fingertips as possible in order to make a reasonable offer that has a chance to get accepted (or at least countered).
Work with a Buyer's Agent who can do the research for you to find out the following:
1. What the seller paid and when they purchased it
2. What mortgage(s) the seller took out and when (which helps to estimate how much is owed on the property)
3. How long the house has been on the market
4. How many times the price has been reduced
5. What have comparable homes recently sold for in the neighborhood
6. Whether there are other offers pending
7. Where, in the short sale process, the property stands (has the short sale been authorized, has the bank considered previous offers, is there an on-line streamlined process, does the listing agent have authorization to talk to the lender, is there more than one lien on the property?)
Knowing all this can help you to make the RIGHT offer that will get you the property at the right price. Offers that are too low can put you at a disadvantage in negotiations with an owner or cause the bank to ignore it all together. Your goal should be to find that perfect price that makes everyone happy!
Sound complicated? That's why you need a Buyer's Agent to help you out. Buyer's Agents are paid by the listing broker, not by you, so there's no reason for you not to have your own representation.

Knowledge is power - so learn everything you can about a property before you make your offer.