Send the offers to the bank....with out signatures....you can still do this.  The sellers will end up signing a deed in Lau of foreclosure.  (I didn't spell that right!) Don't let your paycheck go.....since they don't care...convince them to sign it.  But if they don't, get those offers to the bank.

Christine,

Are they willing to also have their nosedive possibly effect their ability to get another job, car, loan, credit, homeowners insurance, and many other things that are driven by their credit report.  When you can save your credit by getting out of the home, even if you break even, dumping it on the bank can cost them much more and for many years to come.

Elaine, I have spoken to the bank and told them about the offers.  The bank never told me I could do that!  Thank you for the advice.

It"s denial!  You could stand on your head in Time Square but they will never listen...its an ego thing and lots of fear!  Don't worry, its not your issue, its theirs!  Be like a duck and let it roll off your back- Move On!  Perhaps you could suggest to the other agent where an acceptible offer might work?!?

Mike, I reminded them of all the repercussions.  I even sent them a great article I found online about the pros and cons of a short sale versus a foreclosure.  They just don't care!

Elaine,

You meant in "lieu". and you are so right about your advice!

Mike,

You make a great point to!

Sara,

Be like a duck...shake it off! and Move on!!!

Within 18-24 months, I suspect they will be in the same situation in their new home as they are in this one.  People like this generally don't learn from their mistakes because they don't see any consequences from them.  What goes around comes around.  If I were you, I'd wish them much luck....luck is the only thing that they will ever have.

Christine do you know what lender they used for the new house...I am sure that the new lender would not like a possible lien-in-lou-of....How long ago did they sign on that loan...and is there any funding conditions...

There is not much you can do with stupid sellers.  It amazes me how many times the same person can lose a home, car, or file bankruptcy. 

Chuck, I don't have answers to your questions.  I wasn't involved in the purchase of their new home in Texas.

Hang in there....this is a test and you are PASSING !  It will get better,again

I would go with Elaines idea first....you would have to know who the mortgage comp. is or the lender....

Christine,
May I say just one word "Dumb".....these people are just not very smart or perhaps do not understand what a foreclosure on their credit record means. 

This story is becoming all too familiar...  I had 5 offers on a property and the seller disappeared.  It is now relisted with the banks agent.  Bummer, but had to move on.