You say the listing agent said that "the deal is not done." What does that mean? You need to find out.
I understand the frustration but in our business we ar obligated to the seller to show, market and take offers unitil the home is SOLD. I know it sound strange and in some case poeple stop at the point when they have a contract of sale fully executed, but what if ? what if the buyer after it is all said and done does not qualify to purchase in todays market they are removing bank programs left and right so a person that was qualified yestarday may not be tomorrow. Now as Realtors owe you honest and fair dealings so if the bank has not yet fully executed a contract of sale or you have not then the agent although we may not like would not be fullfilling her obligation to the Seller to continue to market the home to the public.
Now I know that are agent and brokers out there that may agree and disgree but if I am working for the seller my obligations are clear. Sell the home to the buyer who is best qualified to purchase with the best deal I can get for the seller. If I where Representing you as the buyer the my obligations are to on your behalf to make the best deal possible. But that may not mean for the lowest price I think that is a misconception that a buyers broker good is to get the home for the lowest price possible, I have a small issue with this beacuse I feel we are their to guide, help negotiate and make sure that you find a home that works and fit the needs and possible wants of your famliy. Now if when can find that and get a cheap price bonus but understand it is not allways about hte money it should be more so about find the home that best suite you and your family all around. Not to say the simple fact that not all Bank owned properties are a good deal make sure tha number you are offering work for you and make sence with the market if you dont have one I would suggest getting a buyers broker for you are entitled you representation and in most case are paying for it. As well I ahve deals with banks that have take weeks and months to get counters or even contracts fully executed and in the mean time had buyers find other home. So good luck
It does not sound like you are being "sandbagged". Both Shawn & Christopher make very good points about dealing with a bank. You have to be very patient, which I hope your Realtor explained to you when he/she explained the process of purchasing an REO property. It's not for the feint of heart!
I always continue to market my listings until all contingencies are removed, & that includes doing Open Houses. It might be a good idea to continue to look for properties while you are in this process in case it doesn't work out. There are so many deals out there now.
Best of luck,