Yet he accepted my offer or 185k.  

The ability to provide a tenant portal, accept payments online, and manage everything from a central software is well worth the money.

This amount is reasonable if a tenant only has to apply to one rental before being accepted, but it can become burdensome quickly to renters in our area who routinely apply to several units before being accepted.  

The revised offer was not acceptable to Hubzu and the contract was cancelled.  

However, I don't always make offers (and for those I do make offers on, I don't always get accepted).

If by some weird happenstance you do accept an offer, you will need to drag them along and then they will expect you to wait while they attempt to find a buyer.

You may want to speak to  your financial advisor as to how much to roll over and to where, Luckily there are several of us on the BP boards who work for self directed custodians, so you can usually count on sound advice in terms of what would be acceptable behavior and avoiding prohibited transactions. 

If you accept something less,  just add it to the purchase price in your mind, because YOU owe security deposits to the tenants when they move out. 

The police department was glad to accept.

Doesn't mean they have to accept a short sale, just that they have to review and consider, and during that process must not continue with any foreclosure event (Dual Tracking prohibition against "Furthuring the foreclosure process").