Unfortanately this has happened to me before on a property that my client wanted, but this involved 4 offers. Crazy, I know. Consult with your agent, make sure you aren't over paying on the property.

Jennifer, I'd have an agent work for you that has short sale and foreclosure experience. All transactions are different and the insight of a qualified agent will be invaluable.

Thanks, Todd Norsted

Jennifer,
Without knowing what the house is worth it's impossible to know how much to counter. Have your agent do a market on what the house is worth now and what it will be worth once you repair it. Don't go over 80 percent of what the CMA says to worth right now.
Michael Doyle Realtor

I have only had one foreclosure (of 8 here recently) where the bank didn't counteroffer in some way. I guess that the averages for my case would say that the majority of banks are usually counter offering if the offer is in any way under asking price.

I have never had a bank counter offer if the offered price is more than the asking price. In this case, they have always just taken the best offer available. I have only had two clients offer over asking price on foreclosures. One got the home, the other did not.

Ultimately, as already stated, what is the home worth and what is it worth to you. Those are the most important figures.

I also wanted to add, in reviewing different opinions on many websites, it's fairly common for a bank to automatically counter offer. I know that they have a price in mind, I'm thinking since they didn't reject it, we still have a shot. I'm looking forward to hearing other people's past experiences and ideas!! (I get to mull over it all weekend now!!!)

As with any other negotiation, how much is the house worth? And how much is it worth to you?

Further, how do you know what the other offer is? Could be the other offer was "full price" at $99,900. Or somewhat higher, but not $110,000. Be careful you're not negotiating against yourself: Your competitor bid $99,900, you bid $110,000, and now you're raising your bid.

So, figure out what you're really willing to pay. Make sure you know what the house is worth. Then submit a bid at the lower of those two amounts.

Hope that helps.