The answer to that question is that short sales take as long as they take, regardless of whether the payment will be in cash or via a mortgage.
The lender does not care, as long as promise of payment is there. Also, on a short sale, it is the seller who signs the initial contract. Then that contract is brought to the bank, where it moves from department to department, waiting for someone to make a decision.
Eventually, several months later, someone approves or disapproves of that contract. If the contract is approved, the buyer with the mortgage, or the buyer with cash, whichever one it is, makes the required escrow deposits and proceeds toward closing.
Marc Jablon, the Jablon Team
RE/MAX Complete Solutions
I am assuming you meant that the buyer has a pre-approval for an FHA loan which may not be your best option on a short sale. So much depends on your property, it's condition and what type of buyer you should be targeting. First, make sure that any buyer you enter into a contract with has a current pre-approval that states income and assets have been verified. A generic pre-qualification is not worth the paper it is written in.
Your best bet on a short sale is a cash buyer but the pool of those buyers is more often looking at properties that make a solid investment property. If there are condition issues with your property that may be flagged during an FHA appraisal you will more than likely be running into issues. The loan will not get through underwriting without those items corrected and re-inspected and I am assuming you do not want to put any of your money into the repair of the property prior to closing. Add to the fact that the bank may not approve a closing date that would allow for the time many of the larger banks and FHA loans may take to get cleared. You should consider requiring than any buyer be fully pre-approved by an end lender with in-house underwriting who can do deals quickly to ensure a smoother transaction between the time you receive written bank approval of the short sale and closing.
Without knowing more information on your lender(s) and loan amount(s) projecting how long it might take is nothing more than a guess. The process is not easy and must be driven by a listing agent teamed with a qualified legal firm in moving the file and documentation or you will be heading for potential problems. Keep in mind that many short sales never close but I would probably keep the short sale approval period contractually at 120 days on most transactions.
Hope this helps....
Tom Priester e-PRO
"Results Driven Real Estate"
Keller Williams Realty