The potential home buyer needs to know if a home is a short sale because the purchasing process is more complex. There is extra waiting and paperwork involved in a short sale.
When someone sells his home as a short sale, it means he is selling it for less than what he still owes on his mortgage. It is often because he can't make the mortgage payments and is trying to avoid foreclosure. His bank has to approve of any offer from potential buyers before the sale is complete. This often requires extra paperwork for the buyer and seller, which takes time. If the buyer isn't aware of this, she won't understand the reasoning behind the delay.