Thanks for all the responses!
The property had originally been approved for short sale, but the previous potential buyer was declined due to DTI issues. Based on the previous appraisal, the negotiator had no issues with offer price. BPO is fine, but the bank has requested a 2nd appraisal, since it has been 6 weeks since the last. There is enough equity in the home for the bank to recuperate all of their expenses, allow $3000 to the sellers, and still have additional proceeds from the transaction. Assuming that the appraised value has not decreased by more than 7% in the past 6 weeks, these figures should still be applicable.
There IS now a purchase agreement signed by both parties; we are now awaiting only the short sale approval, which is expected to take up to another week. According to the listing agent, the sellers' lender will extend the date for COE, and we have already taken steps to amend the purchase agreement to further extend contingencies, inspections, and loan closing date.
It seems that things are now progressing satisfactorily, but there is still a slight concern that the lender will not approve the short sale. There is also a little bit of suspicion, as the listing agent has not been cooperative at all.
Having already obtained a Right of First Refusal, my next question would be:
IF the listing agent hypothetically received a higher offer, could they be working on another transaction without telling us, then present it to the bank and complete that transaction, at which point, there would be no legal recourse to obtain the property? THIS question goes back to my prior inquiry about specific performance. Lis Pendens would not be valid after reconveyance of title.
Should this occur, then I'm guessing there would only be rights to sue for damages and, perhaps, file a complaint to have the agent's licensure suspended or revoked. Is a mortgage processor and underwriter, I had seen many questionable transactions in the early 2000's; During the latter part of the decade, as a Title Clearance specialist, I also saw many anomolies from people trying to get "creative" in transferring title. These occured after properties became REO. I had never had a case disputed after petitioning to have a Lis Pendens expunged. I've also never had a case such as this, or one that I was aware of, that had similar issues withn a short sale.
I don't want to appear to be too paranoid, but I have a vested interest in this property that I don't want to lose. One might suggest that I'm jumping the gun, but timing is everything. The idea to initiate litigation and file Lis Pendens was intended to protect that interest.
As it stands, I am pretty much at the mercy of the listing agent and must hope that they act in good faith. Otherwise, all parties will lose.
Again, thank you to everybody who has contributed with answers. I guess it's difficult to give a specific answer when one doesn't have the complete details. As every case is different, I hope that the responses are applicable to other situations and can at least provide leads for prospective borrowers to follow. As I had faith that everything would transpire according to agreement, I opted against taking action while the window of opportunity was open. Now, I can just hope for the best. Pardon my French, but "Wish in one hand, $hit in the other, then see which one fills up first."
After many hours of legal research and a lot of good feedback, I still followed my heart and the advice of my agent. To sustain control of a situation, one must pull out all of the stops to secure their interests. I think the best action for people to take is to consult an attorney if their puchase is important enough to warrant it.