As a broad general rule, the banks will accept a net to them of about 80% of the appraised value. The seller (or more appropriately the sellers agent) should be making sure that your offer falls within those guidelines to assure that the sale will ultimately be approved by the bank. You are also in the hands of the sellers agent and their expertise in moving a short sale through. Once a complete and I stress a complete short sale package is sent to the bank for approval you should expect 90 days before their final approval. We can have no control over the banks and when they will respond. Their short sale departments are completely overwhelmed and understaffed. I believe for the most part they are doing what they can, however, their systems and infrastructure were not designed to handle the loads they are receiving. Once the bank receives the short sale package, they will order their own appraisal and then begin their review process. Usually you will have several different contacts at the bank along the way until finally you will be assigned a negotiator who will be the liason between the sellers agent and the committee that meets to decided upon accepting the short sale or not.
As a general rule they will not allow any seller contributions to the buyer and will only consider the package and contract complete once any and all contingencies have been met. Each bank is different and working short sales or being involved as either a buyer or seller in a short requires a lot of patience and expertise. You should also be aware that if the agent is not well versed in handeling a short sale, or the bank is too difficult and poor at their internal systems, the home could go to foreclosure before you are able to go to settlement. Any number of things can happen and the deal could ultimately not go through for other reasons as well, however I've closed a good handful now and when it does finally happen, it can be very rewarding to all parties. Good luck and I hope this helps!!