Sadly, there are no rules for short sales, as each bank has their own set of guidelines on how they handle them. Two things happen in short sales: either the bank prenegotiates the price they will accept with the seller, or the bank will not even consider a short sale until the seller gets an offer.
If the later, the offer comes in and both parties sign the purchase agreement. Next, the listing agent submits the offer, an estimation of seller expenses or HUD doc, the listing agreement, and all other documents required by the bank, like seller hardship letter, bank statements, tax returns, etc. Once these are submitted, a short sale agent is assigned to the file. They then go through all the documents, request anything more, request a BPO (brokers price opinion), and send it to the appropriate people for either acceptance or denial. Then, a hold other round of negotiations can begin. This process could take weeks.
However some banks accept the seller's hardship letter and financial documents before any offer comes in. They order a BPO and decide what they are willing to accept from a buyer. This is called a prenegotiated short sale. Once the offer comes in, the listing agent sends in the offer, listing agreement, etc and then the short sale agent who has already been assigned to the file, looks over the docs to see if they meet the terms already laid out, and you could have acceptance within a few days.
These are the two instances I have encountered. Some bank agents are nice and some are down right rude, taking their time with each file that comes in. Banks right now have so many files coming in that it takes a while, so hang in there. Hope this helps you understand the process a little.