It's not always just about the price, but the overall terms. Things such as lender, down payment amount, contingencies, closing date, earnest money, among other things come into play.
I'd just add a caution that simply increasing your offer by a certain percent isn't always safe or best. Make sure you know what the house is actually worth. Some foreclosures are good buys. Others aren't. I did a real quick search of some townhouses under contract in 20147. These all appear to be short sales, some possibly REOs.
List price: $229,900. Described as "needs work." It sold for $300,000 in March 2004.
List price: $259,000. Sold for $281,000 in January 2004.
List price $259,000. Sold for $259,000 in July 2003.
List price $259,900. Sold for $350,000 in January 2006.
Youngster: These are not bargains. I can find you plenty of properties that sold for $300,000 in 2006 that are now listed for $150,000. Or properties that sold for $500,000 in 2006 that are now listed for $325,000.
I also took a look at recently sold properties, both short sales and "regular" sales. There's no real bidding wars going on that I could see. It's possible, as Jonathan implied, that your offers weren't as strong as those that were accepted.
But don't chase properties just because they're REOs or short sales. Pursue properties that offer genuine values. They're not difficult to find. And you won't have to go through the additional hassle that's involved in an REO or short sale.
If the property is a "diamond in the rough" because it's priced way below market value based on it's condition and the comps (similar properties that have recently sold), then you may have to go above the asking price.
This is not uncommon at all in the price range you're in. I've had several buyers pay more than asking price because the property was priced so low to begin with and there were multiple offers involved.
That brings me to my next point...if the above is true AND there are multiple offers, you're almost guaranteed that you'll have to go above asking price. It's up to you to decide on what your cap is on what you want to offer, but make sure that your agent gives you a CMA on the property and determines what fair market value is before you decide.
For example...if the property is priced at $230K and the fair market value is $280K, then you'd still be ahead by $30K if you went up to $240K. Make sense?
The most important thing to a bank is sometimes not a really high offer. Banks like large down payments, quick closings, and little to no contingencies. They do not like the risk of you backing out of the deal and they have to list it again.