Jeff & Jenny - There are absolutely no laws in Arizona that specify one has to "be able to show repairs required by a professional inspector" o cancel a contract in the inspection period. It's painfully easy (too easy, IMHO) to get out of a contract during the standard 10 day inspection period (assuming no additional verbiage is added to the standard AAR residential resale contract).

If you make an offer on a short sale and then find a better home that you want, all you have to do is send a written Cancellation of Offer form to officially cancel your offer. Then your escrow deposit should be returned to you from the Real Estate company, title company, or attorney's office, whoever is holding your deposit. When you have signed and sent the Cancellation form, you are then free to make another offer.

I am cautious about making offers on more than one house at a time, however, because if both offers were accepted, then you would lose your deposit on one, or even be sued for specific performance. You might be able to cancel on the basis of the inspection since short sales are almost always sold "as is" with right to inspect, but you are taking a chance that you would not be able to show repairs required by a professional inspector. This depends on the wording of the Purchase and Sale Contract, of course. Anyway, we agree with your Realtor, it is still risky to place more than one offer at a time. Good luck

Thanks for advice.
Although I hope the bank acceput my offer, I will keep looking for the house.

Mia,

Jay is right on. If you used the short sale addendum you may withdraw your offer at any time. In other words, if you find a better house you can sumbit an offer on that house as well and withdraw the first offer.

MIa - Unless you have some *very* unusual terms written into your contract, you can put as many offers in on houses as you wish (as long as you're will to accept the potential consequences of having multiple offers out).

Hopefully you and your Realtor used the Arizona Association of Realtors "Short Sale Addendum to the Residential Resale Real Estate Purchase Contract" when you submitted your offer. It very clearly states on line 41 that you can cancel the contract at any time before receiving notice of approval. The SS addendum also makes many other points and should always be used in short sale situations.

I haven't read your contract, so I can't say what is or is not in it. There is nothing in the standard AZ contract language that should prevent you from submitting another offer on a home, or from canceling your current offer prior to the lenders acceptance. Read your contract, talk to your agent. Ask them to explain the contract terms if you don't understand them.

Mia,
I am assuming that your Realtor has explained the Short Sale process to you, and sometimes it can take weeks for a final answer from the bank.
Did your Realtor put a clause in your offer giving you the option to withdraw your offer at any time prior to final acceptance by the seller's lender? This is something that I have done for my Buyers in the past.
I'm not sure about your State Real Estate law, so will not comment on your earnest money question. You probably want to discuss your options with your agent.

Wishing you all the best!