Yes, you most certainly can try to negotiate a lower price. Most banks and asset management companies handling REO properties have certain price ranges that they can negotiate with. They are usually willing to help with 3% in closing costs immediately. Of course if the property has been just listed they are more reluctant to negotiate than with a property that has been on the market for 90+ days. Moreover, there are the some REO listings that are coming on the market being priced very competitively in order to draw multiple offers. It just depends on which bank or asset management company is holding the listing.