John, welcome to the wild, wild, west of real estate -Short Sales!
The bank, being expected to write-off or forgive, a significant deficiency expects to best offer to be presented to them. Failure to do so can be considered bank fraud. I am not an attorney, but the Florida real estate attorneys I consult advise to be alert for these situations. The new home owner is exposed to liability and a possible clouded title after the fact.
Be alert also for homes for which the owner is unidentified or historic records are incomplete. In Florida this is a common tatic many 'speculators' use.
As the buyer you have very little authority to influence the outcome of a short sale. Please consult a real estatate attorney in CA for the real scoop there. In Florida, the listing agent presents all offers to the home owner. The home owner decides which offer will be submitted to the bank, not the listing agent. On some occaisions, without knowledge of the listing agent, the owner has contacted the potential buyer to create a side cash deal! Short Sales....the potential for trouble is present, make sure you are well represented.