As one agent said, all of the answers here are good ones. I have found, in this market, the first thing to do is find out if you are competing with other offers, if not move forward with a bid that will include the closing cost help you need to be comfortable. Most banks will take an offer, if anywhere near reasonable, since they do not want the properties in their current inventory. The main key to negotiating is what is written in the original offer - ask for the moon and the stars, but know you may only get the stars. Be sure to have your agent run a Market Analysis on the neighborhood to make sure your "love" of the property does not overcome current values. Every foreclosure I have sold, the seller has paid the closing cost and that included some that originally said they would not.......Good Luck!!