I work with short sales on a regular basis. It is very common for a bank to counter. I always expect a counter. You have to understand with a short sale you are working with a bank negotiator. Once you have placed an offer to the bank, they will typically order a BPO (brokers price opinion) to determine what they feel a fair market price will be. There has been some talk that Fannie mae and Freddie Mac are inflating these values but typically the BPO is what they negotiate from.
Once they get that figure, they typically do three things. If it is less than 50% the value, they may automatically reject the offer, they may accept the offer, how ever the typical response it that the counter the offer. At this point, you need a good realtor that is not just good at selling but also at negotiating. You will need to look at current comps and see if the counter is even in line with what is selling. If you are getting a mortgage, you still will have to be able to get the home appraised at the value they want. You can then counter or accept. I have had many of my buyers counter and the bank come to middle ground. Some, if have included persuasive information with the counter to support the lower amount and have been successful. A lot depends on the negotiator and the mortgage holder.
Some mortgages are held by investors and the negotiator will have to get the lower price approved. Sometimes it is successful and sometimes not. I do not advocate accepting anything just to tie up the property in the hopes to the bank agreeing. They are in the drivers seat and many times that original counter is their bottom line. It is not fair to the seller to simply tie it up as they are frequently on time constraints and they are facing foreclosure and having to move abruptly. Simply to tie up the property in the hopes to get it is simply not fair to them. I had that happen recently. The person tied it up.. then once I negotiated hard and the bank approved their price... they had forgotten and lost interest. The individuals had nearly signed a lease and moved based on this. We lost almost 90 days on this. Not fair. It takes a skilled person to handle a short sale listing and be successful.
If you like the home, put your realtor to work checking comps. If it is reasonable then take it, if not, I would not overpay.