I would offer the bank no more than 25,000. Present the offer with your approved credit documentation. This will show them that you mean business and are a ready, willing, and able buyer of a piece of property by rights ought to be condemned. Indeed,get an estimate of the cost to make it habitable and subtract from the total the house would be worth to you if it were habitable. Bear in mind that property values have dropped by as much as 50%. Unless you're well off and can afford to tie up money for many years, don't buy it as an investment. If you want to buy it to live in, eventually after its been rebuilt and made habitable, consider investing in something else.

Remember, it is not your place to bail the bank out. Give them an offer that represents the real present value and not a penny more.

Mary,
Sounds like its gonna cost more to repair or tear down the house than its worth. 1/2 lots in the area are going for $35k-$75k. Sounds like the bank is between a rock and a hard place. It would depend on the adjoining land and whats on it as to what I would personally offer. I definitely wouldnt pay $50k for it. Feel free to contact me for comparable home/lot sales in the area. These would help to give you a starting point if you seriously wanted to consider purchasing this property.
Kelley