I fell behind on mtg and taxes for months, applied to bank for loan modification. In not hearing a response, in desperation I listed the house for shortsale. Just as the bank was starting to reach out to me for financials, I received and accepted an offer and my bank accepted it as well. This all happend within days of each other two weeks ago. Now I am thinking it might have been better to wait and see what the bank was going to offer me to modify the loan and get it back up to date. Would the bank still consider negotiating with me even though there is a shortsale offer on the table and can I pull out of the sale even though I already accepted the offer?
please help completely confused.

Not without running the risk of being sued for Breach of Contract!

Your problems don;t entitle you to play games with the Buyer.

You might want to consider consulting a Conveyance Attorney and show him/her your Contract to see if there's any escape clause BEFORE talking about "pulling out" as an option.

Contracts are serious relationships that only adults are allowed to enter into for this very reason.

You may have some problems with the buyer should you decide to back out of the contract just to do a loan mod with the bank. However, the bottom line is that the contract between you and the buyer is most likely subject to short sale bank approval. You still have the final decision even if the bank approves the short sale. You may want to speak to an attorney to see what the consequences are if you back out.

Not legal advice.