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Are bank owned houses REO's and short sales asking prices negotiable?

I wanted to know if bank foreclosures REO's and short sale home asking prices are negotiable? Do banks ever accept a lower offering price for property? Since REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction.

Public Comments

1. I think it depends on the area. In my experience no. Short sales came bac with increases that were not negotiabable, and REO's can have muktiple offers and go higher. In a disstessed areas however, if property has been on market very long you can try to lowball. All in all, it never hurts to try, especially if there is a choice of similar properties on the market.
2. Everything is negotiable, but the low ball offers are easier to accept if you can back up the offers with reasons to justify the offer (comps work best).
3. Just like any home sale, it falls to offer and acceptance. You offer one price, they either accept or reject the offer (or they counter-offer). So yes, it's possible. The liklihood of them accepting your offer depends if they think they can sell it for more than your offer, and/or how long it will likely sit before a better offer comes along. Cash flow is king to the lender, they need money coming back into their pocket before they can loan it back out to new home buyers. If you offer a reasonable price and can close quickly, that helps. They obviously like cash buyers more than financed sales, since they won't have to wait as long for their money. Short sales, I think, are probably a little more tricky to negotiate downward. That is because they are still considering your offer against the current outstanding mortgage balance on the property. The lower they accept, the more they will have to write off on that current mortgage. In a REO, they have already written off the previous loan balance and they're not really comparing that anymore when an offer comes in.
4. The easy answer to the simplest form of the question is yes and then no. It depends on how badly you want the property! If there are multiple offers you had best be prepared to offer the asking price and perhaps a bit more. The "best" offer will be the one accepted. It's only about money in these situations, period! Maybe asking for closing costs is a good way to lower the price.