I think you are doing the right thing. To move forward, my opinion would be to rent for awhile, work on rebuilding your credit, and save as much cash as possible. Live within your means.

Unfortunately you are listing with an agent who has about a 40% success rate. This is not my speculation, this is simply what the numbers show when you add up his solds verses his cancelleds, expireds and withdrawns for the past year.

It is your job to be proactive. You should be contacting him at least once a week to check the status. You should get involved with the transaction, find out who the negotiator is, check and see if your listing agent is doing everything and delivering all the documentation the negotiator requires. Normally I would not advise a seller to get involved like this. If you had a listing agent with a better track record for completed sales then I would not be worried.

The questions you posed about whether the lender will accept your offer is something that you should be calling the lender to check on. The lender will analyze the numbers and the paperwork you provided and check out what the BPO and appraisal come in at. Chances are they will accept the sale especially if you show them INCREASING credit card debt. Homeowners CAN increase probability of acceptance by SHOWING the short sale lender financial problems. You need to convince them or at least your realtor needs to. I would be proactive if I were you.

Also pose as a buyers agent and call Battiatas office to find out how easy it is for perspective buyers agents to get information about your home.

As for how easy will it be for you to buy a home in the future? That is speculative but you are not alone. Cleaning up your credit will be priority one but I believe if you clean it up, stay clean, start building up a cash pile you will be okay in a few years.