Need help with this potential short sale

[Stephen N.]

1st mortgage balance: $162k
2nd mortgage balance: $41K
Value of home: $200k
Sheriff's sale date; August 18

I have an option on the house to buy it for the negotiated balance of all liens

How should I approach this?

Should I first try to buy the 2nd mortgage and then try to get the 1st to discount?

Would the 1st have an incentive to accept less than the $162k since there is so much equity?

Any help would be appreciated.