I low balled an offer on a house headed for foreclosure. My offer was $20K less than what the owner owed. It took just over 3 months for his bank to agree to the price. Then my bank appraised it for $20K less than my offer. I made a new offer for the appraised value and his bank took about 10 days to accept the new lower offer. I'm happy with the house but it needs a lot of repairs. I will add that the house lost value after I bought it so if I could have held out longer I could have negotiated for further savings. On the one hand I bought property at less than half its original asking price. On the other hand the house was way way over priced and the house and land need the kinds of repairs that would cause most people to run from the deal.

It can really depend on the strength of your offer (how close to list price, your type of financing), the bank's policies, other offers received. The short-sale process can be long, so exercise patience if you pursue this.

Here is a link that might be useful: Maui Real Estate