If you are a first time homebuyer you may want to skip short sales as it's doubtful it will close by June 30th and the IRS specifically states you must have a "binding" contract by April 30th. Not sure if the IRS will consider the contract "binding" if the lender has NOT approved the sale.
Also... the likelihood of a short sale closing is probably 20% and the price listed may not be in the ballpark of what a lender may allow. The asking price can be unrealistically low and the lender may requirea significantly higher sale price. A short sale may not be the bargain you anticipated.
The answer depends on the lender. In our contract SSA (short sale adendum), we ask the buyer to committ to 90 days for bank approval and specify that the property may Not continue to be marketed for sale, however, a back up contract can be taken. With a back up contract, the bank will not see it unless your contract fails to be approved. There really is not a standard answer. The property being purchased may be "approved", this is a good senario. The lender is in control here and the size of the bank matters. We normally say that the only thing short about a short sale is in the name!
Debbie Albert, PA
Coldwell Banker Residential