I agree with David when he said if you are coming in $75,000 less than asking price then your agent should have comps in hand to substantiate your offer. I would add that the house has to be in such bad shape that you will take it as is for the lower price. It might get accepted if the seller has had a similar low ball offer before, no other offers within a long period of time, or if the seller is in dire need to sell at that low an offer. Often times an offer this much lower is a shot in the dark. Sometimes they go through but sometimes the seller doesn't want to negotiate with a buyer out to get the lowest offer so they will not counter or accept another offer from that buyer. For that reason, the buyer has to be detached from the house so much that if the offer is not accepted then they will walk away and find another home to make a low offer on.
In my market, homes priced right by the agent in that price range are averaging at closing at 97% sell price to list price. So the offer here might be accepted for $359,000.
What does your Realtor say about the 20% lower offer? If this is a for sale by owner and you do not have a Realtor, you are both fair game to each other. He probably does not know the comps for his house and you probably don't know either so you both are playing a guessing game. In that case, may the best offer win. Your $295,000 offer might still be too high. Even if the house down the street sold for $375,000 and another one in the neighborhood sold for $250,000 there are other factors to determine the fair market value. Let the buyer be aware.