Bidding on REOs can be a dirty, nasty, ugly affair, second only to bidding on short sales.
The true gatekeeper is the listing agent, not the bank. If you go directly through the listing agent (as opposed to using a buyer’s agent) he/she makes double the profit, because the meager commission doesn’t have to be shared. Of course this also means there’s no one to represent your interests in the deal, and the listing agent will probably regard you as a helpless suckling Pigglet ready to be slaughtered and roasted.
If you do use a buyer’s agent, it helps to be paying cash … If not make a reasonable offer with a substantial earnest money deposit, and don’t ask for any closing costs, repairs, etc. Overbidding doesn’t seem to help because of potential appraisal problems. Some listing agents will call for highest and best, some won’t.
Other than that, down payment doesn’t seem to matter so much.
Oh yeah, you have to be thick-skinned to play the REO game. Prepare for lots of disappointment and rejection, with regular doses of rudeness or outright insults.