I agree with Rudi- there are more cons than pros. This includes difficulty in acquiring financing, right off the bat.
As James said, usually this is defined by not owning a home over the past 3 years.There are different scenarios as well, but that is generally the rule.
As agents have said before me- find an agent to represent you, preferably one that understands the short sale process. They will find comparable sales in the past few months in the area and inform you of the current value of the home. There are also different strategies when it comes to submitting short sale offers- but that is for your agent to discuss with you.
As many have said before me, if the house is still available in a couple months from now, the seller's will tend to be more willing to accept an offer that they hadn't considered before. A lot of times you may not even have to come up in price at all, just resubmit the offer and hope for the best. Many times the seller's 'disillusion' will be their downfall as subsequent offers are usually lower than the first initial offers. Sometimes waiting does work out in their favor, but the majority of the time the longer the property has been on the market the better it is for buyers. It doesn't hurt to try- all they can say is no, and in that case you're in the same position your in now. Go for it!