I don't know if some have streamlined the process, but when we were doing them, you had to have a contract on the listing before the bank(s) would even look at it. So essentially you're just pulling the list price from thin air. Sometimes the bank would approve, sometimes not. Every time, they would take many weeks (or months) to get back to you. They might come back and just say the sales price isn't high enough, but not give you their bottom line. In that case, you just have to submit another, higher, offer to the lien holder and go through the waiting process again.
If there is a second lien, it's even worse, because the second lien holder will likely receive nothing so they have no incentive to sign off on it.
Most of the time, even though you warn the buyer it will be a while, they bail before you get a response from the bank(s). If you get an "approved" short sale, but the buyer flakes, you put it back on the market (at the approved price). If it sits for another length of time, the bank may or may not decide the accept the "approved" price because the buyer is likely not making payments this whole time, so they're racking up additional fees.
Several times, we had willing buyers who wanted to see the process through, but the lien holders were so slow to respond (and apathetic) that they went ahead and foreclosed on the property rather than accept the short sale. Many times the contact you would have with the bank wouldn't even know the property had already been turned into REO until it was too late.
Now if your lawyer is able to provide you with "approved" short sales, it may be worth a shot. Keep in mind, a lot of times, they beat you (and the buyers agent) down on the commission as well, so you're doing a lot of extra work with the very real possibility of the property never closing, and taking a haircut to boot.
You can make a business out of doing REO and short sales, but you typically would want to be set up solely for that purpose, and have a staff in place for dealing with the different lien holders. I would imagine they would be more reasonable with an agent who does a lot of business with the banks. In the current Houston market, I don't know that there are enough short sales/REO's to justify that specialty. There were a few brokers that did a ton of them back in '08, but I don't see those names much these days.
