In my experience it can take from a couple of weeks to 3 or 4 months. Most will probably fall within the 30 to 60 days range.
Short sales are fine if you have the time and is willing to deal with the frustration and stress that comes with it. Here is my take on the different types of properties you can buy: (note that this is based on my own experience. Your mileage may vary.)
1 - private sales - these are the "traditional" sales. You can usually get homes in better condition. However expect to pay more because most owners will want top dollar for their homes. One of the benefits is that you can negotiate repairs and response times are usually very fast.
2 - bank owned homes - these are usually pretty straight forward. They usually take longer than a private sale but not by much. Banks want to close as fast as possible. However they have lots of internal steps and bureaucracy that they need to go through. And those steps will add to the timeframe. You can usually find a good deal if you are patient and is willing to walk away from the transaction if the bank becomes unreasonable. Houses will typically require some repair because most banks will not make any repair. Remember that the previous owner was probably not very happy when he had to move out. So expect to see damage to the property. In addition, most bank owned homes will sit vacant for a few weeks before being sold. Burglars may be tempted to break in and cause further damage to the property.
3 - HUD homes - a very specific type of bank owned home. Expect similar condition as bank owned home. One benefit is that the process to buy a HUD home is very well defined and follow a very strict timeline. You submit the offer. Get an answer the next day. Send the paperwork in. Get the executed contract. And transaction closes within 45 days of executed contract.
4 - Short sales - houses in short sales are typically in better condition than bank owned homes. Most owners that are trying to complete a short sale will maintain the property throughout the process. In many cases the owner is still living in the house during the short sale process and will move out orderly once the house sells. The challenge with short sales is that there is no guarantee that the bank will approve it. So you may end up wasting a few months. You can get some amazing deals with short sales - again, if you are patient and is willing to walk away from the transaction if the bank is unreasonable.
Note: some REALTORS do not like to work with short sales and will tell their clients that it is not a good way to buy homes. I believe the main reason is because the REALTOR assumes the buyer will be better of buying a house in a shorter timeframe. However, I am a firm believer that depending on the buyer, short sales can be a very good way to buy a home.
And don't be discouraged by the competition. They are not exclusive to private sales. They happen every time a house in good condition goes on the market. It doesn't matter if it is a private sale, a bank owned, a HUD home or a short sale. Buyers are all looking for good deals. My suggestion is to have all your paperwork ready and when you see a house you like for a fair price, submit the offer that same day. Remember that you still have the inspection period to evaluate the house condition in more detail.
VA loans are excellent products. However VA appraisers tend to be more picky than FHA and conventional appraisers. I am not sure how much of this is reality and how much is just perception. Different loan officers will have different opinions about VA loans. My suggestion to you - if the VA product is the best one for you, don't worry what others thing - go with a VA loan. You will be fine.
I hope this helps.
Jose Dias, REALTOR
Realty One Scottsdale