Standard practice varies among realtors which kind of sucks. My preference would be for all realtors to move it into contingent when the seller accepts and into pending when the lender accepts. This is all within the context of short sales.
As you know the status on the MLS has no bearing on the trustee sale process. You may want to advise your friend to ask their agent to call the listing agent and ask the listing agent to make sure the negotiator working the short sale has contacted the legal department so that they can call the trustee to postpone the trustee sale. (I know that was a long chain but you can follow those well)
Alot of realtors will keep it active during the short sale review process because so many buyers flake on short sales and walk away.
