‘Regular’ sales may present better bargain opportunities than foreclosures and short sales. Contrary to popular belief, individual home sellers have more leeway and, often, more motivation to accept a lower offer than bank negotiators do. (In a short sale, the bank is the ultimate arbiter of how low the seller can go.)  The banks often must adhere to guidelines, including that they may only accept an offer X below the fair market value – many banks have a policy of slightly reducing the list price and re-market the home before taking a low ball offer.

Individual sellers have no such limitations, and often take bargain-priced offers because they must move quickly, or are otherwise motivated.  Also, individual sellers have the ability to bargain on other transaction points, as well – you might pay the fair market value to an individual seller, but get them to agree to paint the place, complete the pest repairs and fix the furnace.  Chances you’ll get a bank to do that for you? Somewhere between slim and none.