They are both very safe. You can get title insurance on either one so that offers a lot of protection. What you don’t get is some customarily seller side closing costs to be paid by the seller and is pushed onto the buyer – mainly retrofit, any termite, and forget a home warranty. Sometimes you can negotiate one from the bank but the bank is not like a normal seller. They are a big corporation, so don’t take negotiating with them personally- they certainly aren’t.
However, there are still risks. Sometimes these properties can have defects on title such as a second mortgage or HELOC for short sales or HOA liens and property tax liens against the property. With a short sale- the second mortgage holder must also agree to the short sale and may make the deal difficult or block the sale if desired. I’d say the buyer’s biggest risk is wasting a lot of time and not getting the property. This can be a market risk if the market is starting to make a turnaround because the time it takes to find out 6 months later the prices may now be higher.
Some short sellers may have deferred maintenance on their homes or foreclosures that are in bad condition. Short sales are usually in better condition than foreclosures. If a home was neglected or sat vacant for many years, which is often the case for foreclosures they can require more structural repairs. I find with short sales since the seller is still living in the home, that they are in better condition.
While with short sales you get possession fairly easily when the seller moves out- if a foreclosure has an occupant, either a former owner, a hostile tenant, or a squatter, the bank will not evict them or deliver the home vacant. Those situations are much riskier for foreclosure buyers.