My assumption is that you have representation by both a real estate agent and a attorney
If all documents have been signed by the seller and the bank has approved everything you may have cause for legal action....Hopefully you attorney has a fair amount of real estate experience dealing with short sales...you agent along with you attorney should be able to sort through this for you.
Diane. Realtor Associate
For example, the bank may have offered to modify the loan, so that the payments are lower. That would work for some homeowners, permitting them to stay in the house.
Another option is that the bank accepts the sign-over of the deed to the property; the homeowners give up the house, and get out from under the mortgage. That procedure is called "deed in lieu of foreclosure" or, simply, "deed in lieu."
Sometimes the problem is not the homeowners, but the bank or the investors who provided the money for the mortgage, in the first place. If the offered purchase price is less than the bank or investors think they should receive, relative to market value, then they may reject the offer. (The bank and investors are going to take a "hit," but may not be willing to absorb that great a loss.)
Fortunately, there are still a number of reasonably priced homes on the market - both "regular' sales and short sales - so you should be able to find another home that you like. I'd be happy to help you.