The answer to your question will almost certainly be found in the answer to this question: "WHAT DOES THE CONTRACT SAY?"
You need to review, IN EXCRUCIATINGLY GREAT DETAIL, the entire written agreement, including, but not limited to the initial contract, ALL of the written addenda and extensions, ALL OF THE signatures, initials, dates (and times, where appropriate), time frames and deadlines. There are ABSOLUTELY NO EXCEPTIONS to this!!!!
EVERYTHING that is in writing and is related to this transaction is extremely important and could affect the outcome of your case!!!
There is an enormous amount of information in all of the written documents and in all of the written agreements between you and the seller, that you need to know, and that we need to know before we can even begin to give you a decent answer to your question.
Whether or not you can cancel this transaction without severe negative legal consequences to yourself, depends on ALL of the information that is contained within the entire written agreement, including all of the addenda and extensions.
Every word of your contract, and every word of every written addendum and extension is extremely important. Without all of that in front of us, we can only guess at what might be in your contract, addenda and extensions.
Depending on the wording of your contract, addenda and extensions, what was signed, by whom and when, the outcome of your transaction AND THE ANSWER(S) to your question will be very different.
At this point, you REALLY NEED TO HAVE THIS ENTIRE TRANSACTION REVIEWED BY AN ATTORNEY!!!!!!! Just based on the wording in your question it appears that the Real Estate Agent who is representing your interests as the buyer has blown it BIG TIME!!!!!, and the Real Estate Agent who is representing the interests of the seller has also blown it BIG TIME!!!!!
At this point you have some very serious legal issues and only an Attorney can help you resolve those legal issues. You and the seller are LONG BEYOND the stage where mere Real Estate Agents can resolve this issue for you.
I see that you are located in Atlanta Georgia, but this question is about home buying in Indianapolis, is that correct?
I recommend that you interview several Real Estate Attorneys in the jurisdiction where the property is located. If the property is located in Atlanta Georgia, then I recommend that you interview Attorneys who are practicing law in Atlanta Georgia. If the property is located in Indianapolis, then I recommend that you interview Attorneys who are practicing law in Indianapolis.
Show the Attorneys all of the documents that are related to this transaction. Hire the Attorney that you think is best for your case.
Charles Butterfield MBA
Real Estate Broker/REALTOR
Cell Phone: (408)509-6218
Email Address: email@example.com
State of California DRE#00901872
Your sellers may not have known they were short of funds until they got
their mortgage payoff. Whatever the case, the wording in the Extension
you signed is important. In it, did you promise to wait until the short sale
approval was given, or for a specific amount of time?
At any rate, you state you're tired of waiting ... and your sellers' bank must
agree to the short sale before closing. So, ask your agent to prepare a
Mutual Release that will excuse you from the terms of your contract and
ask for the return of your earnest money.
If the sellers balk at signing, ask advice of a real estate Attorney.
I've sold quite a few short sales, some have progressed quickly because
everything was ready, some have dragged on for months.
And good luck,
RE/MAX Ability Plus