I just recently closed on my house.
We looked at / bid on a dozen bank owned, some priced close to market, some way under market.
NONE of them sold for under the asking price. A couple in the 35k range asking price were priced that low to create a bidding war, and sold for around 90k! If it's a killer deal, expect to get laughed at with your bid. If it's truly only worth 38k, then buy it for that. If it's been on the market, chat with the selling agent, find out why. They could be collecting bids.