Due to the rotten state of the real estate market, REO houses, houses owned by banks after the foreclosure have become very attractive buys. I have seen banks accept offers as low as .50 cents on the dollar meaning, if the bank foreclosed on a loan of $450,000.00 and no one purchased the house at the foreclosure auction, the bank will sell that same house at $225,000.00.
You can get listings for REO properties on various websites or through brokers. Some banks have their properties listed on their websites (for example EMC Mortgage's properties are at here). My advise is if you see a REO house that interests you, make whatever offer you want without any shame. What will probably happen is that the lender will negotiate a price with you and maybe you will get a steal in this market. Remember, the bank may very well sit on the house for years and years to come and have already taken a loss on their books.
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