Why the bank is involved in making a decision on an offer

If it's a "short sale". In other words, the developer is under water and owes more money than he can hope to get from current pricing on the units. he [probably has what is known as a "condo release" construction loan, whereby the bank's lien on the individual units is released as they are sold. but without the release, you aren't going to close with a lien on your unit. So, under normal circumstances where the Sponsor is making a profit, they make the decision, sell you the unit, pay off the part of the loan "assigned" to your unit and keep the rest as profit. But when they are under water, the amount they are4 getting from you is LESS than the amount they are supposed to be paying off on the sale of your unit, so the bank has to agree to accept less. This can be done in one of two ways: the bank and the Sponsor sit down and agree in one feel swoop on new numbers for releasing the lien, or on a case by case basis. It appears that you are in the second category.

30yrs, thanks for the detailed response. I appreciate it.