In North Carolina the Short Sale Addendum allows the Buyer the right to unilaterally terminate the contract and receive the earnest money back at any time prior to the Seller notifying the Buyer of lien holder approval. If the parties have negotiated additional time for “due diligence” beyond bank approval then the Buyer has that extra time as well. If, however, the Buyer decides to terminate the Contract or not close on the property after their contractual window of opportunity has past then they do so at their own risk. Not only will they probably lose their earnest money but they may also be looking at a claim for damages. Remember, the seller likely has a foreclosure in the very near future.
The bottom line is that the Buyer has asked a number of professionals, the servicer, the note holder and the Seller to do a great deal of work on their behalf and behest. When all of those parties have successfully obtained a short sale approval the buyer should proceed to closing quickly and quietly. It is now long past the time to jump ship.
Good luck out there.