[Porsche-O-Phile]

Subjective. Depends on the property. "Asking price" isn't really worth giving much consideration to - it's a made-up, meaningless number manipulated by sellers and agents all the time to try and effect certain results.

When we were making offers at the mid-to-end of last year, I typically would research the history of sales through the County Recorder. If there was a recent sale (last 10 years), I'd whack 60% off that and start about there (actually the offer that got accepted on the place we almost bought ended up being LESS than this, since the FHA appraisal came in at $5,000 under my offer, which made me feel a little sheepish for having offered too much... I had offered $155k on a house which sold for $385k in 2005, the "accepted" amount/appraisal amount ended up being $150k).

If there's no sale in the last 10 years you need to look at comps including the Recorder history for THOSE, Zillow (which sucks, but is sometimes worth a look), etc. A little bit of "gut instinct" comes in here too. The point is that in this market, you can offer WAY lower than you might think at first glance (especially on a foreclosure or REO) and make it work.

Don't buy the RE agent bullcrap about "if you offer too low, you might offend the owner". Like hell. And why do I care anyway? Those jokers are paid on commission and have every incentive to get you to pump up your number. Hell, I even considered making a few five-figure offers on a couple places we looked at. A couple of them I even entertained the idea of bidding "$1" just to see what happened...

Ball is in your court, bottom line.

Be patient. Prices aren't going anywhere anytime soon and interest rates are probably holding more-or-less steady for at least the next 6-12 months. There's no hurry here. If you get pressured/impatient to "get it now", you WILL pay for it - dearly.