Yes. Negotiation is almost always in play. Keep in mind, there are a number of stages in the foreclosure process. They often get lumped together in discussion, but the rules can vary based on the stage of foreclosure the property is in.

Banks negotiate different than individual property owners. They have portfolios of properties they are managing, and their appetite for holding a property can vary daily based on what is happening on wall street, whether they are at month, quarter, or years end, and how much other property is moving off their books.

A few things to keep in mind with foreclosures:

1. It is typically a slow process. If you don't have time for a lengthy transaction, you are likely to be frustrated and may end up with a transaction that doesn't close. [note: I have done foreclosure deals in 30 days, but most take more like 90 days to complete - every situation is unique]
2. If it is a short sale, you are dealing with 2 other parties - the owner and the financial institution - more if there is more than one mortgage. Every party has to agree to get to a closing.
3. You need an agent you trust, that will represent you diligently, and that is detail oriented. One form filled out wrong could results in weeks of delay. If your agent hasn't done a foreclosure or short sale before, be sure their broker has, and that the broker is willing to provide a lot of support. The process is very important in these transactions.

Your agent can best guide you--you can offer whatever you wish on any property, but do be aware of recently sold similar properties in the immediate area--review the data and make a determination as to a fair offer. Do keep in that if a property is listed on target or slightly below today's market multiple offers may occur--your agent is your best source of information.