Thanks for the advice. That is what I was afraid of. We are already at our rock bottom price of $113K and we are offering to pay closing costs out of this price as it is a good starter home for someone. We need to clear about 10K on our home to purchase the home we want.

As for what our agent is doing to bring buyers back to the table...nothing! They produced a bogus loan denial letter and the reasoning was "cannot verify student loan". Whatever! We have considered legal action as they have really put us in a bad spot but our main focus is just that we want to sell our home. They tied up our property for 45 days and at the very last minute decided they didn't want to do it. During that time period homes comparable to ours sold and now it is very slow. I can't tell you how frustrating it is!

The investors here in Middle TN typically belong to the REIN group in Nashville and they only look at purchasing homes that need rehabb or that they can assume the note on IF there's equity in the home...so my advise is to not go that route.

Drop the price as low as you can to move the house quickly..."wholesale" value is subjective, but when a buyer's realtor does their homework, they will pull up the tax record to see what you paid and then determine what you owe....that would be wholesale to them, since you'd be breaking even and just getting out from the house.

Regarding the house you want to buy, the bank will have to approve the sale and pull it from the foreclosure attorney (which means they'll lose about $6K more)....getting them to accept the offer could be difficult, and then it won't come back on the market for probably 90-120 days after they've cleared the title.

What is your realtor doing to try and bring your original buyers back to the table?

Contact an agent that knows short sales also speak with a cpa