There are several things you need to think about when writing an offer in today's market - which has accelerated and is fueled by low inventory and low interest rates (which are climbing slowly but surely).
1. There aren't many great deals left to be had - if they are out there, they are usually snatched up by cash buyers in multiple offer situations and many are being sold by networked realtors who sell it to a their own client before it even goes on the MLS.
2. A short sale is usually already discounted by the listing agent to account for the fact that a buyer has to wait around to be approved (the discount is to keep the buyer in the deal). And, as mentioned by other agents below, some listing prices are intentionally lower to create a buying frenzy and get the home sold quickly. The kiss of death to a short sale seller is if the buyer walks away after months of waiting and they have to start all over again, the seller risks foreclosure - so the sooner it gets sold the better.
3. Make your offer as strong as possible within the fair market value of the home - this is not determined by Trulia or ZIllow or any such site - you need a realtor or appraiser to do a market analysis.
4. A seller wants to see cash or a conventional offer with 20%+ down - there's less risk of the deal falling apart - and cash means no appraisal. FHA & VA offers are less desirable because of stringent condition requirements; but I've still had success if I build rapport with the agent and make a strong offer.
5. Make sure you have a great pre-approval letter, strong earnest money, show proof of funds and work with an agent who is not afraid to call the listing agent directly and establish personal rapport . When agents are getting multiple offers it might help yours if the list agent feels your agent is professional and competent - so they won't have to do the work of two agents and have to keep checking up on your agent.
6. Remember - it is always in your best interest to work with a realtor on the buying side - it costs you nothing and you have a duty-bound agent looking out for your best interests. A great agent will let you know whether the offer you are suggesting is worthwhile or not. In the San Diego market right now, to come in at less than the listing price is simply a waste of your and your agent's time (especially if you know there are multiple offers) - unless there's something obviously wrong with the property and the comparables show it's over-priced. Again - the short sale seller has everything to lose and faces foreclosure if the home doesn't sell quickly - so in my personal experience in SD, short sales are often the best deals - as long as you can wait for up to 4 months for approval from the banks.
Wow - I went a little crazy on my response but I feel it's important to let buyers know how competitive this market is. Setting expectations is an important part of my job. In many parts of SD, prices have gone up 10% or more in just the last 3-6 months (some areas show almost 30% increases). So the home you bid $350k for today, could easily sell for $385k+ in 3-6 months (to me, that's a pretty safe investment). Right now, many buyers face being priced out of the market in up to 6-12 months if prices continue going up AND, if interest rates sneak back up .25 to .5% - it will accelerate that process because higher rates mean higher monthly payments and you may no longer qualify.
Good luck with it all!!
The Ruth Pugh Group