Hello Mr/Mrs home buyers, first you should ask your realtor these questions since he/she should be the main source since that person has a fiduciary duty to represent you and if you are not comfortable with the agent then you may need to investigate further. Second the bank does often ask sellers to update financial information. Third, this information is commonly requested by a negotiator and since it is being updated this is not the the intial short sale opening package so most likely the file has a negotiator. Fourth, you should have signed a short sale addendum when you wrote the offer and there is a blank that should have been filled in with a number that would represent how many days the sellers have to give you written short sale approval, if you are past that point then it is up to you if you would like to pursue another property or wait for this one. A common time many put for that number of days on the short sale addendum is 45-60 days but some ask for more time. In this market time is of the essence and if you feel things are not moving along as fast as you like, then you may want to entertain/pursue other opportunities. A short sale can often take longer than expected and with so many uncertainties anything can happen. I have seen some take over three years before closing escrow, some where the sellers decide to try a loan modification, sellers who decide to cancel the sale and stay in the property as long as possible before foreclosing leaving the buyers with little to no recourse. On the bright side buying a short sale in some cases is beneficial and some buyers walk away getting a home below market value leaving them instant equity and often the property they were desiring to call home.
If you truly have the time and this is the property you are in love with then wait and see what happens, if your financing is not strong and a change in interest rate or your credit score could prevent you from buying in the area you desire then you may not want to stop your search while waiting for this one.
Thanks for your time.