It really depends on the bank. We have had an instance when a buyer of ours had a contract on a property that went from being a short sale to a foreclosure. We were lucky in that the Bank processed the foreclosure quickly and brought it back on the market so that our buyer was able to still purchase it. This is not always the case. The best thing would be if you can find out from the bank or asset management company if there is a specific agent they will be listing the property with and try to be one of the first notified when it comes back on the market.
Unfortunately it sounds like considerable time is going to be added to this transaction if you try to stick with this property as there are specific procedures that the bank needs to take for foreclosures, depending on where in the process they already are.... more