Not that this is a prime example, but I have seen short sales go up in price, usually not to that extent because the bank rejects an offer at the listed short price and the BPO gives guidance. Shorts are tricky, the bank wont say what they will take, just that they will evaluate each offer.
Here’s an example, the owners are a couple hundred grand in the hole, so 25k isn’t going to matter to them, they get nothing either way. It was listed for 280k for a month, then went up 25k, more than likely the bank balked at the 280k.
The realtor is just throwing darts or got some guidance from the bank that they would take 305k. I had a realtor friend with a short listing and couldn’t get any offers, they begged me to offer half off the list (which would have been 75% off peak) just so it could get rejected and they could get an idea what they bank would take. I would have done it but I hated the house and if for some crazy reason the bank took it, I wouldn’t want it. Someone else came in and lowballed, the bank came back and said no but gave an idea of what they wanted and the realtor repriced and sold it. Some banks are weird and overworked so they don’t function like normal buyers and sellers with counter offers, they just say yes or no.
The banks are stupid not to take the money and run, less than a mile away, better neighborhood, a little older, a little smaller but a 3 car garage and on 3/4 of an acre for 249k, that first bank may never see 280k ever again, because the repos are beating the shorts and buyers would prefer reo to shorts.
