To be honest, it can fall apart in the beginning, middle, or end.
Sometimes it doesn't matter how well the Realtor put s the Short Sale package together, seller's valid hardship, appraisal/BPO comes in at market value, etc.
You can be assigned a negotiator that is willing to work with you and then they are pulled off the file and you start all over with another negotiator. This can cause further delays and the foreclosure process does not stop.
We've gone through the whole process with "approvals" and at the last minute, the lender/investor throws another demand out. Some of which can be met, some can't.
You can start a Short Sale and it seems like it will go well. Other's start out "rocky" and continue throughout the whole process - you just stay on top of it through the end.
But again, there's no guarantee's that you'll get the home. If you're an all "cash" buyer, it may be best that you go for a "bank owned" or "standard" home so you can close quickly.
That being said, the other point I would like to caution everyone on (at least in Illinois) is the use of non-attorney negotiators for short sales. I have spent a decent amount of time cleaning up messes left by third-party programs who move forward and get a short sale approval for a seller, then they come to me to complete the transactio (yes yes - everyone out there from other states - we here in Illinois, in the Chicago-land area use attorneys on residential buys and sells). In many of these instances before going to the bank these so-called negotiators do not check title to the property, and therefore do not know of other liens that might effect the bottom line of the proeprty and therefore the amount that they can get to the bank for the short sale. Real estate tax liens, other mortgages, judgments from divorces, etc. The attorneys in this state that do short sales negotiations check these things BEFORE going to the bank for a number. I know it is a round-about answer, but if the bank thinks they are getting one number, then there turns out to be another lien on the property, the deal will fall apart then as well.
There are many real estate attorneys in Illinois that do short sale negotiations, and they charge the same way a neogitaitor should - they only get paid if the deal goes through and the fees come out of the proceeds of the sale, so that the seller does not have to come out of pocket for that expense.
Hope that helps,
If all the questions are answered to my clients satisfaction I then proceed with the offer. I explain to my clients that even though everything appears to be in order it still may take 2 to 6 months to get the deal closed.
Short sale does not mean short time to purchase. If you do not have time on your side to move I do not recommend pursuing short sales.
Americorp Real Estate
Brokers Associate, e-PRO