Determining what you should bid on a property has turned into a much more involved process today than it was 6 months ago. Here are some tips:
Regular Sale. A regular sale is where an individual or entity owns the property and is selling it outright. This situation allows for the most downward pricing negotiation currently. If a 5-10% concession in the price is achieved the buyer is doing great. If the buyer tries to "low-ball" an offer, the seller may not counter or the counter may be minimal in nature. Don't expect the seller to come back with the midpoint of the gap between the buyer's offer and seller's counter. Just because you feel a property isn't worth the price, doesn't mean the seller agrees with that.
Short Sale. The bank that is providing the concession to the seller expects to get market value from the property, not 5 cents on the dollar. Bid market value. If not the buyer may be 4 months into the deal and have a rejected or countered offer from the bank. A smart buyer bids with 5% lower of the market value. That way the bank may see the offer as close enough.
Foreclosure. Many foreclosures (bank-owned properties) are put on the market a below-market value, but they are actually selling for market value or higher. Be careful not to get caught in the bidding frenzy of a property. Most bank owners require a 10 days waiting period after the property is on the market to get multiple "highest and best" offers. For lower priced foreclosures, a buyer may want to put a higher than asking price bid in on the property. (Investors have now upped the amount of money they are spending to get prime properties, so investors and owner occupied buyers are competing for the same properties.
As the market has bottomed, prices are not as negotiable as in a descending marketplace. Look for other concession than price to pretty the deal.
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