Fannie Mae offers a 3.5% contribution towards closing costs and/or appliances on all of their Homepath properties. To determine if a property qualifies as a Homepath property, go to homepath.com.
You are able to get up to 6% seller paid closing costs in general and a bank's asset manager will contemplate this expense into your offer. On bank owned properties, the asset manager has already reduced the price in anticipation of a quick sale AND has taken into account the repairs which will need to be done.
Foreclosed properties are often distressed and the buyers are often incorrect about the "bargains" that they can get when seeking out foreclosed properties. The most thorough means of determining the true nature of the "bargain" and value of the property, would be to pay for an inspection and receive comprehensive quotes for all of the work that will need to be done on the property THEN add that amount to the purchase price of the home and compare that total to the Realtor's market value of the property itself. Watch and see as the phantom equity disappears. Banks are not stupid and asset managers get paid to move properties, especially ones that are in poor condition. Be careful.