In Las Vegas and Henderson, usually there is a short sale addendum attached to the purchase contract which specifies that the buyer must stay in the contract for a minimum length of time while waiting for a response from the bank. The addendum specifies time periods from 45 days to 90 days. After that, the buyer is able to cancel the contract with no penalty if a response has not yet been received from the bank. You should check your contract to see if a short sale addendum was included and what the time period states. You should also ask your real estate agent that prepared the contract to help you with this.
Otherwise, there is no set time frame where the bank must respond. I have literally seen short sales take anywhere from 30 days (that was with a very small bank) to over 2 years. You can read more about why here:
Hope this helps!
Berkshire Hathaway HomeServices
The Tonnesen Team - with over 30 years of experience helping families call Las Vegas "home!"
Personally I don't have enough time in my life to waste a second of it on a short sale that isn't clearly noted as being pre-approved by the lender and recommend buyers not waste their time either unless they have plenty of it and don't really need to buy the property. Right now it's generally taking about 4 months to even get a response from a lender on a no pre-approved short sale.
You also should be working with a Buyer Broker who has demonstrable experience in handling short sales.
Good luck and happy house hunting.
Short sales can take as little as 3 months or as long as forever. Many never get approved, I've had the seller's change their minds and not cooperate, seller's declare BK, banks foreclose, buyer's get tired of waiting and move on and I've still closed the vast majority of them I've been involved with.
Your question is "can you move on", yes, depending on the terms of your contract. I typically will put in a 60 or 90 day commitment from my buyers, after which they can either renew, go day to day or move along. Generally all that is at risk the whatever earnest money you put up, but discuss this with your agent.
Discuss all this with your agent and have them do some research on the agent listing the home. If the listing agent has lot's of experience and success getting short sales closed, be optimistic. If they list 100 and close 10, use a short time commitment and keep your eyes open for other homes. If you can, limit the earnest money amount to reduce your potential loss should you elect to drop this one during your commitment period.