We made an offer on a house

We found a house that met our requirements, and the asking price made sense. It's a short sale - with two Cadillacs in the garage. Indy Mac bank owns the first and second mortgages. The house generated multiple offers, but, being a short sale, any offer had to be accepted by the seller AND the bank.

We made an all-cash offer. Our only contingencies were basic things like: we could do an inspection (only on the house) and we could back out or renegotiate if necessary repairs exceed $40k. We offered a large deposit, increasing the deposit to 30% upon acceptance of our offer. We offered a fast close - less than a month. I thought our offer was as good as a cashier's check. And we offered a tiny bit above asking price.

Well, that was three weeks ago. Last we heard, the bank was still thinking about it. Our offer has technically expired, although we would still proceed with the sale if we hear from the bank, say, tomorrow. I have to admit, I am surprised that the bank would drag their feet when they have a solid offer on the table for a property in Sacramento county, one of the nation's worst housing markets right now. The house, like many Sacramento-area homes purchased in the last several years, is suffering from deferred maintenance. If we buy it, I expect to replace the air conditioner this year - and I hope that it doesn't fail before we get it replaced.

We recently looked at another house, a REO. The house has water damage and mold because the water heater failed, dumping 40 gallons right in the center of the house. It has been vacant so long that rats and birds, at a minimum, are nesting in the attic. I am open to a lot of things, but rats and snakes cross my line. Another house - another REO - is barely salvageable because it sat vacant for so long that scavengers and children have picked it clean. The banks are playing a dangerous game when they repossess a house - hoping that the house will be livable and sellable by the time the bank gets an agent assigned to sell the house. From most of what I have seen on the market, banks are getting hosed on repossessing houses. But, I guess there's something I'm missing, because, at least for Indy Mac, it's worth losing a cash offer at a fair price while they play "don't call us, we'll call you if/when we get around to it."