I am really sorry to hear about your situation. Short sales are tough. Every Short Sale listing agent works differently & most aren't that well trained unfortunately. Even the well trained ones still come up against banks who we just want to Slap in the Head because they just don't get it!
You're only $5k off right now. These HVCC laws (which you probably haven't really heard of) does not apply to a Realtor's relationship with an appraiser, it's only the mortg. lender that can't really talk to the appraiser anymore.
I suggest you contact your agent & get a hold of your appraiser & see if they can't boost it to make $160K.
The problem with the bank & "their" appraised value, is that THEY may have appraised the property 30-45 days ago, but won't send out for a "re-do" for usually 60 days.
It is NOT uncommon that you don't get this "counter" in writing from the bank. Believe me, the Listing agent is more on Your side than on the Bank's side & they just want to get the deal closed & get paid! The Short Selling Bank always (100% of the time from my own experience) will never put a counter price like this In writing. They tell us the listing agent, verbally & we tell you the buyer. It's not until there's a verbal agreement between the parties that the bank will actually Approve the Short Sale & THEN put it in writing.
These short sales are a whole new ball of wax in how we (buyers, sellers, agents on both sides) are used to handling these situations.
On Monday, call your lender & have the appraiser send a copy of the report to the listing agent so he/she can submit it to the bank's negotiator, that way he/she can submit it to the investors & they can see what comps the appraiser is using.
Again I want to stress that the Listing agent wants to close this deal just as much as you do, they're NOT employed by the bank & they don't make more money by making more money for the bank. They're contracted by the owner of record (Mr. Smith) to help them to avoid having a Foreclosure on their credit!!