Share some of the proceeds with her when you make them.  

@James Charles The idea behind a short sale is for the seller to ask the bank for permission to sell the house at a price less than what they owe, with the bank receiving all the proceeds, satisfying the seller's debt.

Any suggestions or recommendation on how to proceed here?

Box 2 is for the gross proceeds (what you sold the house for).

These are documents the attorney has prepared which are defensible in court and which have only the parties, property addresses, etc. left blank.

To contribute an answer to your question, though, we held a property in an LLC and transferred the deed back into personal name just prior to closing on the sale (with proceeds going to the qualified intermediary, as someone else has pointed out).

I just finished purchasing my next project at the court house steps and will get started with the rehab soon.

Buy a foreclosure on the court step. 

In terms of a real estate contract, you can get sued in the civil court.

They also admittedly have approved similar claims in the past, so I have requested copies of all requests made over the four years the condo building has been in business (only 12 units, so it can't be too much).I won't really be able to get an appropriate estimate without ripping up the floor boards, so should I just choose a reputable contractor and then take them to small claims court?