As with any Real Estate Transaction, there are costs associated with closing on the property. Typically, in an REO transaction, the Closing Costs are NOT negotiable and the Buyer simply pays whatever is in the contract. With that said, it should be noted that there are certain 'exceptions' to the rule where the Seller (the bank) will offer concessions to absorb some or all of the closing costs for the buyer. These exceptions are uncommon to typical REO contracts, and would have to be approved on a case by case basis by the Seller and tend to prolong closing. So from the Banks perspective, offers requesting concessions vs. a straight up deal is a easy choice. They will always side with the 'Best Offer' that can close quickly.