It's true that Short Sales are actually Looong Sales...even though banks have been trying to streamline & speed up the process. This is usually due to the intricacies involved in the Short Sale: basically, bank has to persuade its investors to take a loss, since the value of the property is already less than what's owed on the mortgage principal; and to make matters worse, if two lenders are involved (first loan, and the secondary), they can be fighting over how much the secondary lien holder gets.
From my experience, Short Sales suits better for investors than owner-occupying buyers. Investors aren't usually looking for a place to move in; they have plenty time and patience to wait out, 45-60 days if lucky. OO-buyers however, usually have a target date and have made plans on moving, unless they understand the nature of Short Sale and don't mind waiting a few months for a Yes/No answer from the bank.
So my advice to Owner-Occupying buyers:
-- Be sure to have your agent find out the exact type of hardship current owners are into, this way you can assess how likely bank will approve the Short Sale if at all;
-- Don't get too excited about the listing price you see on a short sale! Too many times I had been asked by buyers "how come the price is so low? Is it an error?"
-- Remember, listing price on Short Sale may not be the finally approved price by banks; in fact after 2 months of wait, they can come back to you asking for more. Thanks to due diligence of listing agents and BPO's, nowadays, the listing prices on Short Sales reflect more like current market value;
-- Another common misconception is you can always get a good deal on a short sale, not true! If it's a hot deal and too many buyers pour in, then it could be overbids that get the deal, in other words, the winner may be paying more than its current market value;
-- So don't ignore the many regular sales out there, in a distressed market where these regulars fall victim to their value, you'll be surprised sellers' willingness to compromise.