Your agent doesn't seem to know what's going on, you say. I would make your agent find out what is going on. They should be able to find something out because if the bank has actually agreed and signed something saying they will sell it should not take 5 months from then and still not closed. It sounds like there might be a 1st and 2nd on the home and the 2nd might not be willing to deal for less money that the 1st holder is offering, that happens a lot. The house could go into foreclosure and go to auction in which case you can bid against the bank with your cash offer, but you better do a title search to make sure there are not a bunch of liens on it. It sounds like something is messed up somewhere, but you should be able to find out if the bank has in fact decided to sell it for the amount you offered. Gotta love short sales... more
Keep Looking, YES! That would be smart, since the REO could happen or not and take a long while before you find anything out.
But you'd want to be very careful about "putting in any offers" while you have that other one out there. You could end up being under contract for more than 1 house like that, and we have no idea if you can carry more than one ...... more