Does a purchase agreement expire after a certain length of time on a short sale?

[Deon Wynia]

I have a purchase agreement with some homeowners in a short sale situation. There were 2 banks involved and the big national bank tried to foreclose but didn't know about the other local bank that was going to fight for primary interest. 18 months later they are trying to work together now to get something finalized. I have left my earnest money in this whole time and it has not gone into foreclosure. My RE agent just told me that the listing agent contacted him and said the contract was no longer valid and the only reason I am given is that is was "so long ago."

I live in Iowa but the contracts seem pretty standard. Does anyone have experience with something like this? I'm open to any input.