There is a substantial difference between a "Short Sale" transaction and a Bank owned property, called an REO. Your question, as you can see from the other answers you have received, is not an easy one to answer in this format. The strategy is different as to each of them. The short answer to your question is: "it depends". It depends on what the asking price is, the condition of the house, the comparable recent sales ("comps"--comps are only PART of the equation), and other factors. Your question is really asking "what is the best negotiation strategy. The expertise in negotiation comes from years of experience and a certain "knack" for negotiations. It is part learnable and part "art" or talent for it. My husband, an attorney and Real Estate Broker and I hold, or participate in, seminars on Short Sales and REO's for Buyers. If you are interested in attending one of them, call 408-893-6306 to register. All your questions can be answered there.