Yes, most definitely yes! As with any other house on the market, you should always negotiate the price on an REO. In fact, you should be able to negotiate especially good deals on REOs, regardless of your budget, the comps (CMAs) or how much the bank has lost. With REOs, you're getting the same chance to get a deal that traditionally only professional investors have gotten.

In terms of the size of the discount you can negotiate for, it could range from as little as zero to 20% in special situations. It depends on the skill of your real estate broker in negotiations and whether there are competing bids. A seasoned real estate broker should know when to bid and what terms and conditions would get you the best price with a particular bank. A typical deal is around 5-10% off the list price. Obviously, if there are competing bids, your chances at a deal are significantly diminished and you should consider moving onto another property.

prices are always negotiable, but getting an answer back from a Bank-owned home takes longer than usual

You can certainly offer less than the asking price. I would ask yourself how badly you want that home compared to other homes available in your market. If this is your dream home I would make my offer closer to the asking price. If there are several similar options available I would make a lower offer.

Everything is negotiable. However the owner may choose to accept or reject or counter offer.

Yes your agent can negotiate for you.No you do not have to pay the asking price.

The LISTING PRICE on a house, any house, can vary a lot; the reasoning behind the number can vary a lot:
The Seller may be holding out for a very high price, or, they may be trying to attract Multiple Offers.
There is no set formula for doing this.
The most consistant guideline is a Comparative Market Analysis, (CMA), done by your Realtor. It takes all the factors into account and gives you the comparative WORTH of the home.
Even an Appraisal doesn't do that, because the Appraiser is just trying to tell the Bank that the house is worth "AT LEAST" the amount of the Loan.
You need to enlist the aid of a local Realtor to guide you through this process; and the kicker is that your Buyer's Agent is paid by the Seller; they don't don't cost you anything.

Good luck and may God bless

On REO's you can submit an offer and expect a counter from the bank.

Marco Gomez
NYS Associate Broker
Keller Williams Landmark II
Serving Queens, Nassau & Brooklyn

Hope you are working with an agent seasoned in writing offers on REOS.

For the most part, the foreclosing bank's asset manager and the listing agent will ask that you submit your best and highest offer. You may have only one chance unless there's a multiple offer situation, and the buyers are asked to confirm, or resubmit an offer to be the best and highest.

you can offer LESS, or MORE than list price. But once you're in contract, there may be few opportunities to negotiate a chance in the price not unless your offer was higher than list price in the first place.

I'm not a local agent in your area, however, I know that typically banks price properties based on current BPO's(Broker price opinions), and price the properties at the price they will likely will sell for. However, each case, property, and bank is different, and have different procedures. I wrote a blog post here outlining different scenarios; http://www.trulia.com/blog/EricaBass/2011/06/how_low_can_we_go

I definitely recommend you asking your agent to pull the comparables in the surrounding area, based on the size and condition of the property. Good luck!

Hello Val! Yes, the price of an REO can be negotiated, but keep in mind that the bank (seller) has already "lost" money in the foreclosure process. They may not be as flexible as a standard sale, but the price can always be negotiated.