Being a listing agent for many reo properties, the price is usually already discounted a bit, especially if no repairs have been made.. I have submitted low offers and the bank rejected them and did not respond back to me and I'm the listing agent... We had to resubmit at a higher price for them to counter and we still didn't get it and .
If you really want the property and see the value in it then you should give it your best shot and be the first to get it in to the bank with a very clean offer and good terms with no contingencies and approved for a loan... This price range usually always has multiple offers.
It's difficult to answer your question without knowing the actual property in question. In a market as hot as this one, I'ts unusual that the property is still on the market. We can assume that the offers have been too low, so your strategy of offering below asking is not a good one. Are you working with an agent? If not, you really need one now.
It all depends on the fair market value, based on comps for the area and the condition of the property, among other things. There is no set percentage as to what banks will take under the asking price. Theses days, most foreclosures are being bid ABOVE the asking price, especially if they are priced agressively & below the fair market value. Your agent should be advising you as to whether that price would be a reasonable offer after reviewing comps in the area.. Hope this helps - good luck..
Coldwell Banker Residential Brokerage
Sherman Oaks, CA