In a short sale situation, the seller still owns the property. They can make all decisions as to wehther or not to accept a contract. It is still their home. And only they know how much or how little they can afford to bring to closing.
Once the seller accepts the contract, then the entire Pre-foreclosure package is forwarded to the bank for approval or refusal. So you will be approved by both.
The seller can negotiate what they feel is a fair market value. The bank negotiates what they feel the home is worth.
It can take up to 6 months for approval, or refusal. And sometimes the bank will come back and negotiate. After the seller has agreed.
The listing agent does not work for the bank, they work for the seller. And the buyer's agent should be working on the buyers behalf.
The bank will actually negotiate with the seller's attorney. And sometimes with the sellers agent. But not always.
Hope that helps!
ok, now the explanation for a "non typical" short sale for which the above does not apply....if an owner has been in touch with the bank prior to the short sale and the bank has pre-approved the owner for a short sale in a written agreement with a preapproved listing price by the bank, the bank will probably want to know about all offers and may suggest that you sign and forward any offer you get for their review. in these cases I suggest you (if you are a seller) have this conversation with the lender regarding any offers you might receive ahead of time and follow their suggestions/direction