Short Sales require time & patience. Hopefully you signed an addendum giving you the right to search for another home.
This process, working with a bank, can take months. If the bank comes back with a "yes" by Oct. 15th, then you should be able to close by the end of November, to qualify for the 8K tax credit.
Good Luck!

There are no guarantees with this process and that is one of the biggest frustrations especially when I am working with first time buyers. The bank has the control, even though the seller has signed the contract. You should have signed an addendum that states you can continue to search for homes, that way you won't feel stuck in what seems like an endless process. It can take anywhere from just a few weeks to several months. If the listing agent is well versed in dealing with the short sale process this will help immensely but there are many, many Realtors who only think they know what they are doing and it can end up being disastrous.

I am trying to steer my first time buyers away from short sales as I know the deadline is looming and again there are no answer time guarantees. If you get a positive response from the bank by Oct 15th, you should be ok to close in time.

LILmaniac right now any of the buyers that I am working with are stearing clear of short sales if they are counting on the 8000.00 stimulus money. I just can not tell my clients that for sure we can close a short sale before November 30. As for how long it takes it depends on the servicer of the note and the note holder. I have even had short sales where the note holder came back and told the seller that they needed 20% more than the list price so they came to us with a counter offer at a higher than listed price. Sometimes the lender will not even allow a short sale and go after a deficeincy judgement on the seller.
Good luck the biggest thing about short sales is you need to have patience. It can seem like a long time brfore things start to move.

Your real estate agent should coordinate closely with the closing agent/title officer/escrow-closing agent. Your lender should be contacted every business, the ensure they are in-sink, with everyone involved. Too often lenders drop the ball, due to lenders reps are inexperienced with underwritting procedures, within their respected companies.