If you want to better understand the short sale process, check out the results of the quiz I took on the online Realtor's magazine.  

When representing a buyer, The answer to Question #7 is very troublesome: When is a short sale offer accepted?  According to Realtor Magazine:

"To be considered “accepted,” a formal contract for a short sale must be developed that is approved by the buyer, the seller, and the lender. Before the actual transaction takes place, agents are required to disclose the accepted offer to cooperating brokers, and other offers can still be made on the listing."  Read more  

According to the Realtor’s Code of Ethics, it appears that Realtors should encourage offers until the lender’s acceptance of the short sale, which can often take four or more months. Under this scenario, the buyer is in escrow for approximately four months waiting for the lender's short sale approval while the seller and their agent are encouraging more offers. If no higher offers come in AND IF the lender approves selling for the price decided by the buyer and seller, the buyer will be successful.  



Seems like a big “if” to me; once again in short sales it is much better to be buyer #2 or buyer #3.  Buyer #1, is the one to push the process along; as you can understand buyer #1, often becomes impatient and moves on.  Buyer #2 or #3 steps in and the decision/approval process is farther along.  But, keep in mind even after the wait, the lender can determine that they will not sell short. Or if they agree to selling for less than what is owed (+ closing costs),  it may be at a much higher selling price than the price negotiated between buyer and seller.