Making an offer on a distressed home can be trickier than you think. While you might think you could just make a lowball offer and expect the desperate homeowner and lender to take it, that's not the case. Banks are willing to take a financial hit to get the house off their balance sheets, but not too big a hit [source: Re/Max]. Usually, the listing price on a foreclosed home is close to what the bank thinks they can get for the house, even taking a terrible market into account [source: Gibbs]. The asking price will be based on comparable sales in the area, much like listing prices for non-distressed homes [source: Gibbs]. So, if you want to make a lower offer, make sure it's backed up by some comparable sales [source: Gibbs]. You don't want to insult the lender's intelligence. Banks don't spend a lot of time with multiple counteroffers, so you can't start too low. If they think they can get a better price, they will be happy to reject you after two or three offers, or even one [source: Gibbs].