Short Sale nightmare- HELP!

I just got declined by countrywide homeloans for a short sale. The owner owed 108,000 we offered 101. Countrywide claims the property is worth 130k fair market value, With the condition that it is in there is now way. Can anyone tell me why and what to do? I have a buyer at 112,900. I agreed to the seller I would pay closing costs, but now there is no room? ANY HELP?

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