Mary,

I would need more information to be able to answer this properly. Since I don't, I'm going to assume a few things here so correct me if I assumed wrong. To give your Realtor the benefit of the doubt, the property may already be priced too low to try and get more buyers. You can definitely get a much better deal with cash when dealing with banks. With a short sale, this can be tricky because it's the listing agent who talks to the bank's negotiator and few of them know that the true negotiations for price on a short sale are NOT done with the negotiator. In fact many are getting their commissions slashed by the banks and therefore are running away from short sales. Sad, but true. If possible have your realtor negotiate the short sale instead of the listing agent. The problem with buying a short sale is that the short sale addendum is basically an open contingency which gives you (buyer) an out and therefore the contract is not determinable (Please don't take this as legal advice) and therefore the listing agent is able to send whatever offer they feel is best even if the seller signed the contract. In my opinion this is unethical, but then again they are representing the seller and who cares about my opinion, right?

Moving on....

A cash offer will be accepted by the bank over one with a contingency for financing all day long as long as it's within their parameters. Any real estate agent (or investor for that matter) who's dealt with short sales knows that the bank will take up to a certain percentage below the BPO or appraisal. So as long as you don't go below that your offer will be accepted even over higher offers.

As far as a foreclosure (I will assume that you are referring to a bank owned property since most pre-foreclosures are short sales) I will tell you that you have a lot of negotiating power. Again, many agents are trained to listen to the asset managers at the banks, and how to handle transactions their way..... They get a BPO or appraisal done on the property and the bank holds them to it. If they don't sell at that price they get yelled at..... It's like having a boss when you're self employed?.... I know, it's weird.... Also, they have carrying costs and many duties so it's tough to get an REO agent to lower the price too much. Whenever possible it's good to get a hold of the asset manager directly. Or if you know who the bank is you may know their situation and how motivated they are. Not all banks are willing to drop the prices dramatically. Some of them don't have much inventory anymore and it takes true negotiation to get the right price.
I wish I could tell you that it's easy to get a huge discount on a property, but if that was the case then there wouldn't be a need for people like me in this industry.
2 mistakes to avoid when negotiating both Short Sales and Bank Owned properties:

1. Don't pick on the house too much
2. Don't send a low ball offer

To clarify, a low ball offer is an offer well below market value without being justified.

I could go on but I have to go....

Mary,

You Realtor can advice you on how much to bid, but the final decision is yours. He might or might not be right. Your strategy will depend on the time on the market, comparables, area and many other factors (including if there are multiple bids). I have had clients getting nice discounts on foreclosures and others have had to offer full asking price or even above if there are multiple offers in order to win the bid.

On short sales, most times the listing price is more like a start bidding point. After a few months they can have more than a dozen bids and at the end most of them never close anyway. My advice on short sales is to stay away from them.

Good luck!

Carlos
ABR - Accredited Buyer Representative
.

You can submit an offer at any price you want.

Whether that offer will be accepted is another story.

Cash doesn't get the "discount" many seem to think it does.

Many foreclosures in the Phoenix area go at, or even above, list price. Short sales are a whole different story. Many of them are priced ridiculously low at prices the lender will never accept. They are a crap shoot.

But clearly there is no set price you "must" offer.

Nothing says you can't offer what you want to. Cash usually gets a better response. Short Sales can be difficult. Forclosure, banks want to get off their books and sometime are more willing to negotiate.