2. You may THINK that he did not submit your counter offer, but there is way to know. It really doesn't matter at this point.
3. Why would he need a "cancellation of contract" if there was no contract?
4. At this point, the Appraisal is a meaningless piece of paper, barely good for kindling.
It is time to move on, find another dream house.
Good luck and may God bless
You probably have a signed contract with the seller's. The bank then reviewed your offer, and it was too low for them, thus they rejected your offer. If you made a counter-offer to the bank, it would have had to be signed by the sellers first then sent to the bank. Ask your agent (in writting, ie email) if the counte-offer was presented to the sellers for their signature, and then to the bank.
Also, the bank is not legally obligated to send you a copy of the appraisal summary...it is just part of the negotiations. I don't send copies of appraisals to buyers, I just tell them their offer is not good enough.
Here's my two cents on buying short sales. I find that many people go into them thinking they are going to get a great deal on a property (you mention your "low bid"). A short sale will sell for Fair Market Value. It's a waste of everyone's time by putting in lowball offers just in the hopes of getting a great deal. Is it possible that your agent doesn't want to play the "lowball" offer game and isn't supplying you with the info you request??
I just wrote a blog post about why buyers may not want to buy short sales: