On this issue, I have to side with my colleague Ron Thomas. I am having a very difficult time not only following your story, which seems full of questionable allegations, but also have to ask why, if you are in Missouri and are probably buying in Missouri, you are posing this question in California? Although short sales are everywhere, the practices in one state does not always occur with the same regularity in another state. Foreclosure laws and notice periods are different in each state and that has a huge effect on short sales.
It seems most likely that your questions should be posed--not to us here on Trulia--to your Realtor who represented you or to the broker where you Realtor is employed. While it may seem very easy to point fingers at the listing agent, it seems far more likely that the bank chose another buyer or that the investor who owned the loan may have foreclosed on the loan. I also suspect that you were playing sort of a property "roulette" in gambling to see which short sale might close first and which home you could finally buy. Unfortunately, if the same bank was involved in both transactions, the bank (rather than the listing agent) may have asked that you make a choice between properties since you were not financially able to buy both properties.
Regardless of the outcome, until you get answers from the people who really matter--your agent and the broker--it makes little sense to create a complicated dust up that could result in damages to your ability to buy in the future.
1) The Realtor's Broker
2) The Local Realtor Association in your County
3) Department of Real Estate in Sacramento
It is really difficult to follow your story; you obviously do not WRITE for aliving.
You should have, by now, figured out that SHORTSALES are not for the weak-of-heart:
You were not the only on trying to buy them; someone else was working on them too, and there was no way for you or your Realtor to know about the Taxes until it came to light: They just took a different path.
You said you "had a contract"; with whom was that CONTRACT, the Seller or the Bank?
"the realtor ...excuse why it was extended"; you had to sign the extenion, not the reator.
Then you switch to a CONDO which was also sold from under you.
You simply will have a hard time proving that anyone did anything illegal.
It is the nature of Shortsales that you will have to kiss a lot of frogs before you find your prince.
Good luck and may God bless
The next stop would be the local Board of REALTORS. Call them and ask them to appoint an Ombudsman to resolve the issue. We in the Real Estate industry work VERY hard to avoid ethical breaches and to earn the Public Trust. The Board will have a committee who can investigate the problem and in many cases, give you satisfaction.
The last stop would be the state Real Estate Commission or other such agency who issues licenses. The practice you describe is not unheard of, but well beyond the bounds of ethical practice. To be fair, Short Sales are complex and take a lot of time. The results are entirely yup to the lender. But holding it with a contract and then selling it to an outside investor is out of bounds. IF the lender went ahead and foreclosed on the property while you were under contract, an Investor could have bought it at auction, without using the agent. Make sure you have all the facts before you.tarnish someone's reputation.
Doc Stephens, REALTOR