Hello, I am in the process of buying a short sale. My offer (when I made it last month) was a backup and  it turns out 100K over the approved short sale price. The primary offer is withdrawn due to the primary buyer moving out of state. Yesterday when I was signing the contract papers, I first came to know of the approved short sale price. The listing agent modified my offer to the short sale price and added an addendum that states I will pay the seller 100K outside the sale price to satisfy other liens on the house.

I don't mind paying Short Sale price + 100K but don't want to do anything outside the law. I am new to this and seems like my agent also does not know all the rules. As part of my research last night I came across this site and also figured out that what seller is asking is illegal. Is this understanding correct? If that 100K shows up on HUD statement, then is it ok? What is the best recourse to get this house?

BTW, I also found out that this seller declared bankruptcy a few years ago so all liens/debts should have been discharged. If that is the case, my guess is that seller is looking to pocket $100K

thanks