My husband and I recently made an offer to a seller of $315,000 on a house that was listed at a Short Sale price of $359,000. The sellers accepted our offer. It went to the bank for their approval/rejection. After about a month and a half, just last week, we were informed by our buyer agent that the listing agent informed her that the bank rejected our offer, because it was too low, and a significantly higher offer had come in. She stated that if we wanted to significantly increase our offer, we could.  Since we liked the house we increased the offer by $20,000. We received word back from our agent that same evening stating that the listing agent once again said our second offer was still not competitive with the other offer which was still significantly higher.

 With that said my husband and I decided not to make another offer, since we had no idea how significant the other offer could have been.  Our first offer was based on the Comparative Market Analysis for homes sold in that subdivision over the past 6 months.  The realtor we worked with thought that our offer was a good one and felt comfortable submitting it.

My questions is, since we did not make another offer after the second one, should we receive written notification from the bank or our agent notifying us that the contract is now null and void, or just the mere fact that the buyer agent told us that the bank did not accept the offer is sufficient.  

All comments are appreciated.