Most people are reasonable. Sellers don't want (or expect) more for their property than it's worth. Conversely, buyers don't want to pay more than it's worth. Often, both the seller and the buyer make judgements based on the market, to assemble what is a "fair and reasonable" offer.
It sounds to me like you need a realtor to help you assess the market, and help guide you through what is considered reasonable. This is part of a realtor's job.
If you don't have a realtor, let me know, and i'll be happy to help you assemble this information. If you do, my advice to you would be to simply judge what is a fair and reasonable price for the property, and put together an offer.
When I have a buyer, and encounter a property that is overpriced or on the market for an extended amount of time, I often have a particular standard of operation when putting together an offer, in an effort to help the seller understand that their home is overpriced.. I'll assume your realtor has the same. If not, or if you don't have one, again don't hesitate to contact me.
This home at its current list price of $94,900 has been on the market for 42 days. In total it has been on the market for 315 days, having gone through a few price changes on the way.
As for the seller's wilingness to lower their sales price, well, that's really only known by the seller and their agent. As with all things in real estate, everything is negotiable and a Realtor should be able to negotiate the best possible price for you with the seller and their agent. My opinion is that if you've got a decent idea of what you want to pay for it and your Realtor agrees that its an acceptable offer, you should make an offer on the property. Of course, go to low and you risk your offer being denied, which is how a Realtor can help you by offering you local comparative sales to base your offer off of (as well as making sure you're not paying too much for a property as well).
Hope that helps and good luck to you in finding a home!