What makes you think the mortgage is that high? Did you estimate by taking a percentage of the last sale price? You could be wrong. It never hurts to ask or at least check the public records, if that information is available.
If you are correct, the seller probably knows the property is overpriced but is hoping for a miracle. Yours might be the offer that convinces the seller to approach the bank to do the short sale or the seller may just be hoping that someone bails him or her out and is willing to wait. Based on what you have stated, I would consider making the offer, armed with all the comparable sales. Making the offer will likely elicit a lot more information about the seller's situation and perhaps start a productive conversation. If the seller says no, then you know you have an unrealistic seller that is just fishing.