David: Firstly, if you find something you like on an approved short sale, then go for it. All the uncertainty has gone and, unfortunately for the lender and seller, so has the original buyer - usually they get fed up with waiting. This leaves the sale ready to close and eager for a new buyer. These move very quickly.
However, unapproved short sales are a totally different kettle of fish. I've had s/s deals that have been approved in 45 days (very much the exception) and others that have taken 9 months. I know of other Realtors that have waited even longer, over a year, for their short sales to be approved. If you're in no rush and you have the patience - remember everyone thinks they have patience but it can be a long, long time, then I'd recommend against them. Having said that - you can pick up some excellent deals on some very nice properties. They're usually in better condition because most have the owner still living there.
Work closely with a Realtor who has experience in this market - and these days it's most of us!! Definitely don't do it alone. I ask a lot of questions of the selling agent to make sure this is worth committing to, or if it's just a delay tactic before foreclosure. The price too, has to be realistic and I ask a questions about that too and do my own research. If the bank isn't going to approve the price, then it's just a waste of time. I often see some ridiculously low prices out there that I just know won't get approved and I'm usually right. Remember, every bank has it's own BPO (appraisal) done prior to approving an offer.
Personally? I deal with lots of short sales and honestly, I wish it were otherwise. I like to keep my clients updated and be on top of things and it's so difficult to give status reports. The banks work at their own pace with no rhyme or reason to anything. They're very frustrating but if you can deal with all of that AND the possibility that after waiting 3 or 4 months or more, that you'll get the offer turned down... then go for it!
I personally encourage people to determine what they want, where they want it and determine their price range. You'll be surprised at how many regular sellers are competing with the distressed property market.
Good luck to you!!
Villa G Realty, Inc.