David...It was decided by the lender that the current owners were NOT suffering a hardship and
a short sale at any price less than amount owed was not acceptable. The sellers could not bring
the difference between your offer and the amount owed to closing,so ...no deal! The seller and bank need to agree on a short sale or it continues to a full foreclosure. During these short sale situations, all parties are at the mercy of the person collecting documents and speaking to the bank. I 100% recommend using a Certified Distressed Property Expert as your agent. They have been down the short sale/foreclosire path many times and if it is do-able, they will do it!
Your options are to wait till bank is in full ownership or find another property. Keeping in mind that prices are on the upswing and banks are only willing to negotiate so far... :)
Kathy Roule...Broker/Realtor....Re/Max Sunset Realty...Certified Depressed Property Expert