Hang in there. With the chronic shortage of suitable homes for sale, many potential home buyers find themselves in your situation... between a rock and a hard place.
All you can do is be patient. As the buyer, you are the least significant participant in the process. As you suspect, there does exist a gigantic pile of obstacles that must be overcome before success is realized. Even if the banks agree, ( they do not negotiate in good faith with the homeowner) to waive the deficit, even if you agree to toss in a $40,000 tip to one of the lien holders, the seller by get fed up with the abuse and move to their plan B, with means No Sale.
With so many home owners a the very edge of selling the home on a break even basis, whether a home is a short sale of not MAY depend on the offer received. If the listed price was the break even point, and you offer 15% below, your offer, in essence, forced the short sale. (15% is the statistical saving of a short sale over a traditional sale, for those 30% that succeed)
There is much we do not know about the sellers situation and your offer. What we all do know and have voiced is when engaging the short sale process, logic, reason and good faith are the first elements to disappear. You will find it repeatedly stated that the ideal short sale buyer is the one who has NO emotional attachment to the home. Regardless of the good intentions of everyone involved, short sales have a very high failure rate. Avoiding the resulting heart break is one goal of those agents representing buyers who are shelter seekers
As professionals who are enmeshed in the process all the time we often forget that "Everyone Does Not Know" what the banks are doing.
Your question> "does that mean the negotiating has already been done, and banks have already agreed on a price?" Some banks WILL resume the process where the last negation ended (should all terms and conditions remain the same) if occurring within a predetermined time frame. Because every short sale situation is different, there exists only an illusion of rules. In some cases if the bank(s) or investors believe the homeowner has cash stashed under the mattress or sock drawer, they will try to get it, even if it originates with the buyer! Anything can happen.
Short Sales, also known as the "Wild, Wild, West of Real Estate" exist in an environment where ANYTHING can and often does happen. What you must avoid is second guessing what the pros are doing. No, you will not be updated regarding every step. No, you will not be advised of every negotiation. All you can do is be patient and ready to respond at a moments notice.
I do wish for you the very best outcome possible.
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL