If this is a rental property the seller may just decide to keep it if he realizes he may have a substantial IRS Tax bill if he's forgiven the loss!
So, keep looking for the right home up to the day you receive the short sale approval in your hands listing you as the buyer. So many things can go wrong so you do not want to miss out on other true bargains (bank owned) while you're waiting until/if this ever gets approved.
All the best,
If it has been going smoothly so far, hang in there and keep in touch with your agent.
All the best to you.