I'm sorry that you are having some difficulty with this short sale transaction. The first answer below is correct in that your rights depends on what your purchase agreement says and the shortsale addendum. Here in California, our typical purchase agreement and shortsale addendum says that the transaction is subject to the seller's lender's approval of the transaction. Because the transaction is a shortsale, the seller will not know how much of the remaining debt will be forgiven by the seller's lender until the seller's lender sends the shortsale approval letter and terms. If the seller's lender refuses to forgive the remaining debt or deficiency, the seller may refuse to consumate the transaction because the seller's lender may still try to come after the seller for the remaining debt even after the sale is closed by garnishing the seller's wages, etc. As such, the seller has a right to review the terms of the shortsale approval to determine if they are agreeable for the seller.
The only type of shortsale that may insulate you from this risk is the HAFA shortsale which is a government subsidized shortsale approved by President Obama and enacted in April 2010. HAFA means Home Affordability Foreclosure Alternative Program. Approximately 100 lenders/servicers agreed to honor the HAFA shortsale. The HAFA Shortsale applies to owner occupied properties OINLY and the homeowner must have suffered a financial hardship that makes it difficult for the home owner to afford the mortgage such as loss of income, illness, forlough, death of income earner, etc. In a HAFA shortsale the remaining debt or deficiency must be forgiven by the seller's lenders. The government pays the services an amount for thier loss and the home owner gets up to $3000 for relocation and his debt is fully forgiven.
I will recommend that if you are unable to work out this current shortsale or if the seller cannot qualify for HAFA, you should limit your future search for homes to regular sales, foreclosures or HAFA shortsales to limit your risk of the the seller changing his/her mind after you have waited so long.
Do not hesiate to call me at 818-825-6996 or visit my website at http://www.BogunRealtyAndLuxuryHomes.com.