If the bank is listing the property at $128K, that's probably close to the market price based on their assessments. Now, if there's absolutely no interest in the property at that price for months, then you can put in a lower offer and try your luck.
Great Question. Remember that the person evaluating your offer on behalf of the bank has probably never seen the property themselves. They are relying on the reports from the listing agent and field service agents on the condition and pricing of the property. By working with a qualified buyer agent, you can formulate a strategy that gets you the property for the lowest price possible and still have it accepted by the bank. We work with buyers just like your to get the best deal all the time and would be open to discussing the specifics with you.
Local Tax Assessments are not market value. Choose to work with a local Buyer's Agent who can sit down with you and go over recent sales in order that you form an educated offer. There are lots of opportunities with bank owned properties, but it is an area in which experience will certainly help.