1. In the scenario as you presented you don't have what is known as "final acceptance." As such, the bank is free to withdraw from your negotiations to pursue other options at any time. Until all parties have agreed on all the terms, signed a purchase agreement stating those terms, and then delivered it to the other party, the deal is not done.
2. That depends on the terms of the agreement - but since you don't have final acceptance - yes they can. Once you have acceptance they still may be able to show the property (depending on how the deal is structured) to prospective buyers to solicit backup offers.
3. Yes, as previously noted in your other post:
Time is normally of the essence in a real estate contract. In the end all parties must perform on all promises or the purchase agreement is null and void.
4. You will normally have the right to accept the deal as originally agreed upon (before you countered the inspection contingency), but that depends on the bank and simply having the right doesn't make it easy to enforce. In this situation if the bank wants to move on they probably will and to enfore your right to accept, you would need to hire an attorney and sue the bank for specific performance.
4b. At any time you may remove your contingency and inform the bank in writing that you accept the deal as previously stated. As long as you deliver something to their agent in writing to this affect, before they deliver you a notice of their intent to cancel, you should be more than fine.
A personal note: Buying a house is a very emotional process. You found a house, fell in love with it, wrote an offer, waited for it to get accepte, did an inspection, made a counter and now your are panicing because after all that you are afraid you might lose the house. My advice would be to stay the course and wait for the bank to respond, unless this is such an absolutely good deal that you just can't live without it.
#1 Trulia Agent in MN
I am a bit confused as to why if there wasn't much wrong with the home you would ask for additional money off, especially $5000. Home inspections on a foreclosed property are more for your information purposes then anything and not a way to wiggle out more money from the seller. The property is being sold "As Is" and unless there is something substantially wrong that wasn't obvious or something you didn't anticipate from the beginning it isn't a point of re-negotiation. If its a good home and priced well they very well could be other or back up offers on it.
I hope you have a buyer representative assisting you who has experience with foreclosures. They are unique and need to be handled carefully.
Your questions read like you don't have a Realtor or you have a new one.
READ WHAT YOU SIGNED....
Does the addendum to the purchase agreement (most REO properties have an addendum) read that the seller reserves the right to cancel the agreement at anytime?
Does it say the seller can accept offers at anytime?
If there wasn't much wrong with the property why ask for the price reduction. That statement reads as though you had a binding agreement, did your home inspection and then sent over an amendment. Your amendment is not ONLY requesting a drop in the price, but an extention to the closing date.
If you are using the seller's attorney, the delay in the title exam is seller delay, if you are using the lender's attorney (or your own) the delay is buyer delay.
Have you ever hear the expression He who has the Gold makes the Rules?