All of these answers are offering you sound advice, but I have to wonder if you are going at this all by yourself (and why?). You can take advantage of professional advice and help by using a Buyer Broker, and it will not cost you anything!
A Broker has access to more information, and more up-to-date information, than you can find on the public web sites. We can compile a comprehensive price analysis very quickly which will give you a fair offer price--or at least a starting point. The bank already has an idea of what the property is worth, and they likely have a "window" within which they will accept an offer outright. If they have held onto it for 1.5 years already they either haven't seen an offer they like, or they are not being realistic about what the market will bring.
One word of caution, since the builder may have gone out of business there may be unpaid contractors who have filed liens against the property. Hopefully, the bank has settled all of that, but it is worth investigating. A Broker can request this information from a title company for you.
Whatever you do, have the property thoroughly inspected by a professional home inspector, even if you have to pay for the inspection. New homes have problems too, and when a builder walks away from a job you do not know what has been left undone, or wasn't done right in the first place.
In your offer you can still ask for items that are commonly paid for by sellers, such as an appraisal, survey, and even inspections. Whether or not the bank agrees to pay for them depends on their bottom line. Just like a private seller, they have a certain level of motivation to get this house off of their books.
The good thing about pruchasing an REO is that you will usually get an answer on your offer within days rather than months as in a short sale situation.
If you are serious about pursuing this house let someone help you (naturally I'll volunteer for the job). You don't want to make a mistake now and regret it for years to come.
Realtor-Coldwell Banker Legacy