The concept seems pretty simple.....in theory. You're in the market for a home, find one that you ABSOLUTELY fall in love with, and make every attempt in the world to try to get it for as little as humanly possible by submitting an offer considerably less than the list price and its market value.
Here's the reality...
1) Unless you're dealing with an Institutional Seller (Banks, Credit Unions, Investors, Etc) and the person on the other end is just some number cruncher whose simply waiting to go home at 5:00, then you're most likely going to completely upset the Seller, which could potentially create a problem for you...especially when they decide to refuse to negotiate with you at all.
2) COMPETITION IS EVERYWHERE!!! Chances are, you're not doing the Seller a favor by purchasing their home. The reality is that if they don't sell it to you, then they'll simply sell it to someone else. Here's where it's important to listen to your agent. Be sure to ask questions about the absorption rate within your market. Find out how long the property has been listed...AT THAT PRICE. Discuss that property's market value with your agent. Finally, be sure to have your agent determine whether or not you're in a multiple offer situation. You may not be able to find out the amount of the other offers, but you should be able to find out the number of offers presented.
3) Do NOT always assume that a call for "highest and best" is forthcoming. This tactic is mainly used by Institutional Sellers only. Playing Russian Roulette with the home of your dreams can be quite disappointing if you submit a low-ball offer as your initial offer and the Seller chooses another one.
Now, do NOT mistake my words. I'm not telling anyone to pay more for a home than what it's worth. I am, however, saying that you have an advantage in using a Buyer's agent. You have one for a reason....use them.