I think you have the process correct. Since your offer would be alot lower, I would offer them this amount and inform the agent representing the bank that this is your highest and best. They will take some time getting back to you with the hopes of another offer. Trust me banks are not in a hurry. FHA is a great way to go, do you know you don't have to put the 5% down with FHA? Last but not least, did you know HUD is offering a special program if you purchase one of their homes. You have to be a owner occupant and there is a few stipulations. Good luck RW
PS if you are working with an agent, it is not my motivation to get in between you and your agents relationship. We all work hard and I respect that. Good luck again.
If you have the time to wait, a short sale property could be a good deal. Just be prepared and educate yourself on the process as much as possible before you make the offer. I've included a helpful link for more information. Good luck!
This is a case by case situation. Have your Realtor put together a CMA on this particular home. I have been selling REO's, HUD and short sales for the past 8 years and I am surprised everyday how different these transactions can go. Every lender is completely different. Regardless of your offer, prepare to wait a week or two for a response to your offer. The condition of the house is a major factor as well.
Make sure you have your financing in order. What kind of loan are you doing? I would say your closing cost shouldnâ€™t be anymore the $2500-$3000, and that's including title. Good luck. RW