This is the million-dollar question. Most lenders are so swamped with short sale submissions that its employees can't respond in timely manner.It can easily take many months.
If you're running past 120 days, it's possible that the listing agent or a third-party negotiator is not on the ball and is lax about calling the bank. Calling the bank means waiting on hold anywhere from 10 minutes to an hour or longer.
Or, a lengthy short sale period can also mean the bank has internal problems, not enough staff or has lost the file a few times, prompting the listing agent to resend the package over and over.
It can also mean that the appraisal is substantially higher than your offer, and the listing agent is building a case for a new appraiser.
Unfortunately, you can't always avoid problems on a short sale. Patience is key. You'll most likely eventually get short sale approval. Threatening to walk away means nothing to the bank. Your best bet is to stick it out and wait, providing you truly want the home.
Are you working with an agent? I'd be happy tp help, call me 805-416-6528 Paula, Ziprealty