In the end of sept I was contacted by the sellers lawyer and was told that the bank counter offered my offer.

Then his counter offer might be 80% , and your counter to that could be around 70%.  

Counter offer:  Purchase price:    $375,000.00$100,000.00 down payment6% interest 20 year amortization period and balloon payment after 5 years no pre payment penalty.  

I'm stuck in a dilemma trying to decide if this is a good deal or not, and should I go through with the purchase.I came across a property that is for sale for 50K, the city has it accessed at $46,500 and after a few counter offers back and forth we're currently at $45,500.

Worst they can say is no, and that normally means they make a counter offer, and you can offer a slightly higher number.I just posted about this the other day.

Sometime soon you will get the odd counter-offer, and the real game can begin.

I'd like to counter offer, offering them to finance the 70K they need.

A good listing agent would take an offer on a non-state contract and -- with the guidance/agreement of the Seller -- just write a counter-offer on a state contract and present it back to the potential buyer.This solves the contract issue in a legal way (as opposed to not presenting the offer)...

Obviously, the financing part weakens your offer, but the banks understand that loans these days can take up to 6 weeks or more.If you tell the bank that you'll be paying all cash, I wouldn't put the closing date at more than 4 weeks out; in fact, they might counter-offer with a shorter time frame.As an example, I had one a couple months ago where I made a cash offer towards the end of the month and said I'd close in 3 weeks.

At least not in Vegas, it could sit for 8 to 12 months, you submit an offer, you get a multiple counter offer to submit best and highest which is a tactic to have you bid against yourself.