Most of the time, yes, you do.
Most banks really want to get the house off of their books as it has already cost them a bunch of money and they want to cut any further losses.
It is easy to submit a ridiculously low bid because there is no emotional attachment to the house by the bank. A private owner may become emotionally invested, and not want to work with a buyer who has insulted them with a low bid—families have been raised in that home and memories have been built there, after all. It's hard to cut ties with a place from the start, much less be insulted by a low offer.
But when a low offer comes in for a bank-owned property, it is just a business deal.
The person representing the bank is an hourly paid employee who could care less about the one out of THOUSAND of properties they have to deal with. Much like a real estate investor, they will negotiate the offer up as high as they can until the buyer says they are at their highest and best then take the offer. The investor and bank want to just move forward to the next property.
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