Dear Hockey,
The only thing I can add to these informative responses is "condition" of the house you're interested in and condition of the comparable properties sold.
Newer kitcen-1950's kitchen, baths, heating systems, etc.
These things can have a huge effect on the value of a home. Another reason to have a good agent's advice.
There is no generic answer to your question, most of what I sell have been forclosures and short sales. There are times I recommend a low offer because of the work involed and there have been times I've recommended offering above asking price if they expect to actually get the house!
Good luck to you!

Hello Hockey!

Great Advise from other comments here. I just wanted to give you a bit more information regarding the two type's of home purchases. The biggest difference between short sales and Bank owned/foreclosures is that a short sale the home owner in many cases is still living in the home and the purpose of a short sale is to Avoid the Foreclosure process.

The process for getting an approval from the Bank can take on average of 90 days but this is with an educated Real Estate Agent working the deal. What you need to know is if the Listing Agent is the one who is negotiating with the Bank and have they had special training in the process...you should get weekly updates as to the progress this is key. The Bank will make sure they get very close to current market value...so work with a Good Buyer agent who will pull comps for you through the Lehigh Valley MLS. Trulia and Zillow are great but NOT a true picture of what is going on in the market place because it is not up to the min accurate. The MLS can tell an agent if the sale was a short sale, foreclosure or regular sale and if there has been updates to the property etc. It even offers interior photo's etc. A much better comparison. Plus, don't forget about location, location, location.

A foreclosure is a property that has been vacant for about 1 year before it has hit the market. Properties in this position usually are already listed below current market value and Banks have already lost a great deal of money on the property and are looking to make as much as possible of course...you again need to establish current market value and a good starting offer would be about $20,000.00 under List price...but, this will all depend on the competition of other offers also. You can have your Agent conduct research on the Listing Agents closing statistics...this will tell you on average how much below list price the properties that they are selling are being sold. This information is also gathered from the MLS.

A foreclosure can take anywhere from 2 weeks to 6 weeks to get a reply to your offer but the waiting and frustration is in place of you paying current market value for the property. In the end you are paying by playing the waiting game.

Also, all this said. Just because I can prove to you that the current market value of a home is X - Does not mean you as a buyer see the value of the home's value at X - It comes down to what you feel the home is worth to you and what you want to make an offer on the property for....remember if there is no competition (other offers) then the worst they can do is say no. But, keep in mind that the banks will be doing their own market value and making sure they are getting as close as possible to that number.

I have a video site that will give you all kinds of free Home Buying information for the Lehigh Valley area. Check it out and good Luck if I do not hear from you.

A Bank fo

It all depends on the list price and what the true value of the home is. Short sales will take longer and are a very time consuming process. If you are going that route, I would recommend hiring a realtor skilled in short sales.

Determining the offer price for a property is part art and part science. The most sensible, offer price to use is the one that most lenders (who will fund the deal) will use, and that's the current market value as determined by the appraisal. However, in most cases you'll present an offer before ordering an appraisal or inspection. So, you should start of with making an offer close to the current market value as determined by the recent, sold comps, and you can readjust your price from there if necessary (after having processed the results of your appraisal and inspection).

Ignore all of that nonsense about discounting the list price by X%, because it's not enough in some cases, and it's too much in other cases.

Please be careful. There are big differences between the two. Short sales are properties still owned by an individual and need to be approved by the bank and can take months to get pushed through. Bank owned properties are just that, already owned by the bank. They can be easier to make offers for but sometimes require additional paper work. I have seen offers as low as 50% below list get accepted. There is no standard. There are many factors that will detemine what a bank will accept for a property. I would advise you to to contact a licensed real estate proffesional in your area to consult with.

Utilize Trulia website to get your stats and trends. This will give a better understanding on what is going on your market. This way it will give you an idea on the difference in the listing price and the actual sold price.