Minor correction. You are LISTING the house below the payoff amount. The bank will be doing the 'pricing' of the house. Your listing price has NO legal standing for the price of the house UNLESS it is high enough to pay off the balance OR the seller has agreed to make up the short. Otherwise, it is just a marketing tool used to get offers to send to the bank.
25 percent seems like a very low number.
And we have friends who wanted to look at a short sale on the market and their realtor friend told them NOT to even bother, that it would take way too long to buy any short sale in this housing market.
And that there might be five percent of residential housing investors as opposed to a mere five years ago.
How astounding!!