Short sales are complex transactions. Much of the public, attracted to short sales and bank-owned properties by the prospect of getting a bargain, doesn't know the shocking truth about the short sale timeline: it can take weeks, even months before the seller's lender reviews and approves a submitted offer. What's more, the listing agent is under no obligation to present the offer to the lender for approval.
Many buyer representatives don't realize this last fact, stemming from a mis-understanding of the difference between short sales and bank-owned (REO) transactions, and insist that short sale offers be presented to the lender. In a short sale, the borrower is still the owner of the property and the listing agent owes fiduciary duties to the borrower, not to the lender. The listing agent is obliged to forward to the lender only those offers that the seller-borrower finds acceptable for personal reasons. As a third party approver, the lender is not party to the transaction between buyer and seller.
This article sums it up nicely:
A short sale is a completely volunatry attempt by a borrower to avoid a foreclosure -- a borrower does not have to opt for a short sale. That being the case, how could it be said that a lender has a right to be presented an offer?