The most you should pay for a house is the lower of: (1) the house's value as determined by a CMA--a competitive market analysis--taking into consideration the house's specific condition and needed repairs, or (2) the monthly mortgage payments you can reasonably afford.

That's the most you should pay. How much under that might you pay? That all depends. Sounds as if the seller might be motivated, if he/she is paying two mortgage payments. It's likely the seller will need at least what he/she paid for the house plus about 10% to cover real estate agent fees and various selling and closing costs.

So now you have a range: The most you should pay and the least the owner is probably willing to accept. Make an offer anywhere in between. Some agents would probably suggest an offer 5% under the adjusted CMA (assuming that's in your affordability range). Others might suggest 10% under. Others, even more.

Check with your agent. Get the CMA. Get his/her advice. Then you decide.

Good luck.