Original listing shows short sale subject to lender approval. They probably heard back from the bank and the bank wouldn't let it go for $195k, but willing to let it go for $250k.
There may have been an offer on the property (before short sale package submitted to bank), offer submitted to the bank, and the bank came back at $250k. Either the original offer or another one may still be working with the bank. Nothing fishy in my eyes.
Just because someone wants to short sell a house for a certain price, doesn't mean the bank will agree. With a short sale, you aren't really negotiating with the owner since the bank is the one taking the loss.
Mike
