may owe the bank X amount and cannot afford to sell for less.
The question I have for you is who determined $308,000? Is this something that might have been determined by the county for property tax valuation? If so then this is what is called an assessed value which may be a portion of the actual value. Each municipality determines the rate based on several factors.
Hopefully you are being represented by a buyer's agent who will provide you with facts about what has recently sold in the neighborhood or if unavailable a similar neighborhood based on several criteria. This is what is known in the trade as a CMA (comparable market analysis) or BPO (broker's price opinion).
Together you and your agent will determine what the house is worth according to the facts and figures based on a 3 to 6 month market activity. Your strategy in negotiating a price that both you and the seller will agree upon is usually based on the knowledge of your agent.
Lastly if you are seeking a mortgage the most important figure (appraised value) will be determined by the bank appraisal. This is the amount that the bank will be comfortable in lending minus the down payment requirements. Of course you can pay more than what the bank is willing to loan you but you will need to come up with the difference, have the sellers adjust the contract price downward or walk away from the deal proving that your contract contains those contingencies.
Sounds complicated? Not really. You'll need to trust your real estate agent to guide you through the process. This person has the duty to act in your best interest. Logically they want to make sure you are satisfied with the outcome because you'll most likely refer them to a friend, which is a large source of potential income.
In conclusion no agent unfamiliar with your market can determine if that offering is too low without knowing all the details that determine an initial offering. Too many unanswered questions like what's the condition? Is the property near a highway? What year was the assessed value determined? Is it a bank owned property? Etc. Etc., Etc.,
Where are you arriving at your "fair market value"? If similar homes have sold for $308,000 in the last 30-90 days I would agree that is probably fair market value, however if you're going off of a tax assessment or what similar homes were going for last year or the year before then your thinking is flawed.
If the true market value is $308,000 then the only reason a seller would list it for $275,000 is to generate interest and multiple bids. In this case if you bid $235,000 then you're probably finished before you even start.
Contrary to popular belief, sellers aren't so desperate they're going to give away a dollar for fifty cents. I'll assume we're talking about a foreclosure or short sale here?? In my observation, most banks have been listing homes at a lower than market level price from the start in order to attract multiple bids. What this does is a) help the home sell quicker, b) usually drives up the price, and c) gives them multiple options to consider and perhaps have a backup plan if one bidder can't complete the transaction.
I wouldn't discourage you from trying to get a good deal, but don't get discouraged if you bid on multiple homes and don't get any. Keep in mind that the listing price is sometimes the best deal. I'd highly recommend you allign yourself with a realtor who can guide you through the process and provide professional advice.
Best of luck
Homeowners insurance is determined upon the loan amount. Your lender should be able to help you figure this out. Like with any other type of insurance, theamount of coverage will affect your price. The homebuyer is free to choose any insurance company they like. Call around for some quotes so you have an idea.