short sale with 2 leins on house

I’m working with an owner who’s house is in the foreclosure process. It’s going to the court house 11/2 if the loan isn’t paid in full. I received a payoff balance from the first mortgage company(133k) and got a verbal amount owed on the second bank (18k). The second bank has written the off the loan as a lose but the lien is still available. The house isn’t worth $151K. Its worth about 140k minus 13k in repairs.

The payoff statement for the first mortgage is as follows
Unpaid principal balance $75,745.05
Interest 28,500k
Escrow/Impound overdraft 15,500k
Unpaid late charges $600
Expenses paid by mortgage service 11k
Foreclosure fee $2200
Recording fee $35
Property inspection $25
Total payoff 133k

I was told that if I wanted to do a short sale I don’t have to factor in all off the expenses on payoff sheet (escrow, inspections, recording fess etc). Is this true? Based on this payoff, what’s the lowest you would offer so that the bank gets enough to be satisfied? I know the second bank could put a stop to this because they probable won’t get any money but if it goes to the court house next week their screwed any how.
I was original looking to put an offer in at 120k (133k - 13k in repairs)
I am now wondering if I should offer 100k. I know I can put in any offer I want but I want to be realistic. If your wondering why I’m interested in a property with little/no equity, that’s because I got someone lined up to do a rent to own with 10 to 15k down