It feels to me like the banks play by a whole different set of rules than we go by in a more typical transaction, but if everybody wants to close on the property, it will probably happen. You tend to be at risk when you don't get agreements in writing, and that would apply to short sales or a typical (if there is such a thing) transaction.
One more thing. I'm just curious. Who is holding your earnest money deposit? Have you read the terms regarding it's release? Good Luck with this and let us know how it turns out!
What does the contract say happens if the seller can't close by the closing date?
Ultimately, this is a question of contract law. In Illinois, real estate agents can't practice law even if we know what the law states. I'm not sure what Michigan law says about that.
Ask your real estate agent or your attorney to be sure. If you have no agent or attorney, you should get one.
Best wishes in your process, Jim, Home Savings of America.
Tim is correct, you do not have a deal until both parties have agreed on the terms and both have signed the purchase agreement. You don't really say if it is a short sale or a foreclosure but then again it doesn't matter. Someone representing the bank would be the signer on the offer to purchase.
He is also correct when he states that the EMD check does not get deposited until there is an offer signed.
If you don't have a purchase agreement signed, you don't a closing date.
In deals with banks this can be a common thing because they do take so long to give an answer.
I hope you are working with a Buyers agent that can assist you with these questions also. I am surprised you were not made aware of these items by your agent. Have your agent contact the sellers agent to see about getting updated information on the progress. If you and your agent feel the need to right an extension then do that.
I'm guessing that by the last 2 words ("By bank") you maybe talking about a short sale.
If so, get an extension on the contract and make sure there's a closing date on the contract.