Reasonable? Unreasonable? Those words don't make any sense.
You have some good descriptions of how banks negotiate. Most will look at your offer. But most also have a process they go through of lowering their price every 30-60 days. Some will be willing to short-cut that process. Most don't seem to be willing to. Still, it never hurts to offer.
But that brings us to those two words "reasonable" and "unreasonable." They have absolutely nothing to do with any offer you make. What you have to do is think like an investor. Do the numbers make sense? And that does NOT mean arbitrarily lopping off 25% or so from an asking price that obviously is too high (or else the house would have sold).
Figure out what the house would be worth in good fixed-up condition. It's what investors call "After Repair Value." Then determine the cost to properly do those repairs. Let's take an example, roughly using your numbers. Let's say the house, fixed up, would be worth $250,000. And let's say that the contractors you have take a look at the house say it needs $50,000 in repairs and upgrades to get it into good condition. In that case, someone would be crazy to pay more than $200,000 for the property.
But understand that your time and effort--and the inconvenience you'll go through--are also worth something. Further, in any rehab project I've ever seen, there are some surprises and unexpected expenses. On a $50,000 job, allow at least $10,000. And if you think your time spent finding and managing the contractors, and all that hassle, is worth $10,000, add that in. So now we're up to $70,000 in rehab costs, a cushion, and compensation for your time and effort. Subtract that from the ARV of $250,000, and the most you should pay is $180,000. Hopefully, you'd pay less.
Is that "reasonable"? "Unreasonable"? I don't know. But that's how you should approach it.
Shalimar is a well kept secret. It started as being a bedroom community for Eglin AFB. There are great schools including an elementary school where kids can still walk to school. It has a great golf course which is currently being taken over by the local's. There is a mix of homes, from large waterfront houses to smaller more modest homes. There is actually a few areas with new construction. My favorite store is the Village Market which has a butcher who hand cuts steaks and other meats to order.... more
Are you still looking in the Shalimar area? I just visited a few of the properties here with another client. There really is not much on the market right now. Call me if you want to see some properties.