In addition to all the previous answers below, make sure you know the water pipe issue can be corrected. Short sales can create a great opportunity to purchase at a good price but the benefits can be rapidly eroded if you buy a property that requires water issues to be addressed.
Good Luck, Ken Dooley.
Since you are working with a realtor, it would be advisable to use them as your primary resource. As previously mentioned, eventhough a "short sale" price is negotiable the bank must approve any amount below the amount actually owed to the bank. They do not like accepting a lot less money at this stage of the process.
Short sale prices may be negotiable but you should note two things:
there is likely to be much less room (percentage wise) to negotiate or lower the price, and
if you offer at a price that is lower than the price at which the property is being advertised for sale then you should be prepared to wait much longer for a response to your offer.
Your lower offer may trigger the bank to have the property re-appraised and the bank will wait until the new appraisal is received and compared to their previous appraisals to determine a new price.
Broker Associate, Sudler Sotheby's International Realty
The best way to get an offer accepted (by anyone) is:
1. Present the best case for you as the buyer:
-proof of deposit funds
-loan pre-approval pending appraisal and title
-no unnecessary contingencies - no selling your property first, etc.
-shortened contingency periods- tell them once they approve the price you can close fast...maybe 30 days?
2. If you are offering less than asking your Realtor could do a brief market analysis, perhaps show some recently sold properties that are similar and their actual selling price.
3, Include market data to show which way the market is headed. For example, in my market we had a pretty could drop a while back, so I showed a graph of the downward trend of average sale prices and stated that my buyer was concerned that the property would be worth less after they bought it.
You are dealing with business people, so use business strategies to make your case. If you are unable to show that the property is really worth the price you are offering, I would ask you, if you were my client, "are you trying to steal the house or buy it"?
Also, who cares what the other realtor says. Her job is to submit all offers and she isn't the bank so it's not her call. If you need expert representation on your purchase I'm happy to help guide you through this.