On the other hand, and as others have already stated, it puts the buyer in a difficult situation if they don't. However, at least in the State of Wisconsin, the buyer can always ask for a release of the contract at any time. The seller doesn't have to agree, but it can be done.
As a buyer's agent, I always mark the addendum to reflect that all dates and deadlines run from lender acceptance. That way the buyer is not putting out money for earnest $, inspections et cetera until they know that the bank has accepted their offer.
The shortest and clearest thing I can tell you is, if you are in love with the house, don't give the bank a time line. Just know going into it that it could take awhile and MAKE SURE that the agent for the seller knows how to correctly submit your offer. This is probably the most crucial aspect of buying a short sale.
Wishing you good fortune in finding your perfect home.
I encourage my buyer clients on short sales to put a deadline on a response from the bank as they can extend that deadline if they wish. Obtaining a bank's response can be a very long waiting period and requires patience but in the meantime there may be other properties that come on the market that look promising to the buyer. This is a means for the buyers to disengage themselves from the short sale and move on to something else.
Prudential Connecticut Realty
As with everything this clause needs to be considered very seriously. The time limit needs to be realistic - if you give the bank 15 days to respond than that is anything but. The seller may opt not to move forward with you if the time frame is too short .. the bank may not consider your offer a serious one if the time frame is too short - in the end they will respond when they are ready!
The best thing to do is still to have a complete short sale package submitted according to the bank's specifications, a seller's and buyer's agent who understand the short sale process, a Title Co. who can prepare the documents fast and a ready, willing and able buyer who has been made aware of the ups and downs of a short sale.
To make a long answer longer, yes we build a time limit into our offer but it needs to be realistic. Once the deadline is reached (consider the time invested by all) - if there is hope and all parties are in agreement, it could be extended.