It depends on what the house is worth; have your agent do a CMA on the property.
All of my clients are exclusively looking for bank owned or short sale homes, so I've been more than waist deep, you could say...
I submitted a contract on a bank-owned home for some clients last week; 10k under asking price ($150k on $160k asking price). It was actually a very fair & reasonable price for the home. The bank countered back at $165,000!!!!! Yes-- you are reading that right--- the bank countered HIGHER than asking price!
The asset manager wasn't very well informed on the market conditions, and assumed the house was worth what it was back last fall. We had found a better home for my clients and withdrew our offer. After the bank took a week to originally get back to us, once we withdrew our offer, we had another counter offer within hours from that bank's asset manager in a much more reasonable range. I never heard or have seen anything like it... I guess once they realized we were the only rational live buyers for that home, they changed their tune, but it was for nothing.
My suggestion is that if you lowball them, send strong comps with your offer to support your bid to the asset manager. All the asset managers know is numbers. If you're going to lowball, for better results I also suggested a fully completed LSR and a closing date of 30 days or less to show you can move, move, move once they accept the offer.