Buying a short sale property is different from buying a standard sale in that the seller is not really interested in getting the highest price possible. Seller wants a buyer who will give him or her the best opportunity to close escrow without complications. Buyer's agent who wants to be successful in getting acceptance on his or her buyer's home needs to see this and not try to outdo everyone else with the price.
As a short sale negotiator and listing agent, I prefer all cash buyers who are willing to waive all repairs including termites and to be flexible with my seller on closing date. It is helpful to have your agent touch base with the listing agent to get a sense of what he or she prefers to see in the offer before making one.
If I'm the listing agent for your deal and the price for standard sale for your property is $250k, I wouldn't thnk 194k is too low and recommend to my seller to reject it outright. i would look at everyting else in the offer like waiver of repairs including termite, flexibility in closing escrow date, seller's choice of escrow and title company, buyer's agreeing to pay for home warranty plan, and buyer's interest in the property. Price is rarely a concern for me as I can always to go the buyer's agent and say, "Look, if you trust my ability to negotiate with the lender to get the best possible price for your buyer, this is what I would like the offer to look."
A buyer with the highest price compared to others doesn't impress me if he's looking at other properties at the same time. I will have some concerns about the risk he or she would exercise his or her contingency to get out of escrow and get his or her deposit back if he or she finds a better property. I want a buyer who makes me feel like he or she has just found his or her dream home - my sellers's.
No one wants to pay full price on a short sale when they can avoid the hassle of the short sale approval process by going with standard sale. As a short sale buyer, you want to look for listing agent who's an expert in short sale negotiation, someone who knows what to say to the lenders to take a big hair cut from the fair market price. Key is to find out who's neogitating the short sale for you. Remember,, the llisting agent, not the buyer's agent, is the one negotiating with the lender.
You want a short sale negotiator who knows how to resolve second loan issue and title problems such as judgment liens or mechanic's liens which from time to time prevent a short sale from closing.