low balling was not a bad practice. However, asset managers have different priorities that are not directly related to property value. That become evident and the crash matured.
Today, Aug 2014, a 20% low ball hasn't a snowballs chance in LA...or FL.....or TX.
But those folks coming out of those seminars still try to snag a deal with the help of hard working, energetic, newbies.
You aren't going to get an asset manager (some of the dumbest and most arrogant people on the face of the earth) to take you seriously as you've already discovered. In fact everything you've written about this property tells me you should be running away as fast as you can. Obviously the HOA is a disaster and you're already experiencing the stupidity and arrogance of asset managers. Move on and stop looking at foreclosures unless you enjoy subjecting yourself to aggravation.
From my understanding, typically REO's go within 5% of the asking, that is the banks threshold.
It sounds to me as though as have a good case. The key is to present your offer in terms that an REO asset manager will understand.
When a property enters the REO inventory the asset manager will have an appraisal done in order to come up with a valuation. This work may have be completed without anyone actually looking at the comparable sales. So in order for the asset manager to change their mind they will need new information that they deem to be reliable.
Assuming that this property is listed by a Realtor, generally the Realtor has other REO listings, so the problem is that they may or may not have inspected this property. They also may be using the tactic of allowing the asset manager to over-price the property, then after their are no offers or only low offers will be able to say to the asset manager that the market is saying the property is over-priced.
The other possibility is that by pricing it high the asset manager can show the investor that they tried to get as much money as possible for the property.
You are viewing this as one property. For the investor, the asset manager, and other parties this is just part of a larger pool of properties (perhaps ten or 100 properties) that they are trying to sell. Do not expect to receive the same response from these people as you might from a single owner.
It really makes no difference what we feel. The banks are in the driver's seat and if they feel your numbers don't work for them......NEXT......and move on the the next offer.
One of the benefits to working with a local real estate professional that is somewhat versed in "foreclosures," is they will have a grip on what the local trends are and what the banks are accepting in specific complexes.