I answered a similiar question to yours and have cut and pasted it here for you.
Regarding foreclosures. I went into escrow yesterday 03/17 on a foreclosure. We were up against 5 other offers. I am seeing banks pricing homes purposely to get multiple offers. You should always treat an offer on a foreclosure as a normal sale. Ask for everything you would ask for on a normal sale. We actually got termite repair, closing costs, one yr home warranty and prepaids for our FHA Loan. This was with countrywide (Bank of America). It also depends on the buyer, your client, how motivated they are? is it the house they really really really want. I would normally start low even if is priced to sell. Always ask the listing agent how many offers are you up against. A home in Anaheim went on the market as a foreclosure the same day it had 11 offers on it. Another listed for $289,900 in Corona sold in the high 3's. Give your clients what sold in the last three months in that tract, they will judge from there what to expect.... more