Are you in full contract with the seller or did you merely put in an offer. Most of the time today, the bank won't even consider an offer unless you go to full contract (and deposit your down payment). Then it goes for bank approval. From your posting, it doesn't seem like you got bank approval yet. If the bank turns down your offer, you can increase it, have it resubmitted and then see what happens. But, if the bank rejects your offer, you should get your down payment back. With two banks involved, it could really take a long time until they decide to play nice with each other. In any event, short sales are a pain in most instances. But, unfortunately, they are part of our new reality. Good luck!
Certified Buyer Representative (CBR)
Senior Real Estate Specialist (SRES)
Century 21 Princeton Properties
Top 2% of Century 21 Agents Nationwide