I cannot speak to the issue of opinion in reference about 33 W Ontario or average market times as I have no information on those subjects. However, the financing aspect I can address.
A cash offer always looks the most appealing of offering types. However, and as we all know, you should obtain financing IF... the key is IF, you can qualify for the financing that is relevant and needed. In terms of how low to offer, that depends. It depends upon the market time of the property, how the selling agent responds to your questions related to interest and activity relevant to that property, the investor's balance sheets and effective inventory of foreclosed properties, current foreclosure comps... and a list of other factors I won't bore our readers with. I will say this. If it were me, I would find 1 or 2 properties (to start) I was really interested in. I would pull title to verify lien amounts. I would have a good realtor with access to market data pull up VERY accurate and similar comps that are foreclosed (short sales are not within this topic of discussion so we'll keep this simple). This way, we have some leverage. First, we know approximate value with recent sales. I use the word approximate very loosely here. Secondly, we know the balance and types of liens. If there is a 2nd mortgage you can automatically discount it. The second lien holder will almost always take a complete loss.
So in your example of a sales price of $410, let's assume liens of $300k for the 1st mortgage and 110K for the 2nd. Let's say the market time is long - 270 days on the market with 2 price reductions (for example), the selling agent indicates there is very little interest/activity in the property, the bank foreclosing is Countrywide and we know they have a gazillion foreclosures on their books and finally, current comps are lower via what the realtor forwarded; $290K to be exact. Using cash, I may offer one of a few different ways: 1.) 80% of the 1st lien amount ($240K) ...OR 2.) a dollar amount between the comparable sale amount of $290K and the lien of $300K, somewhere in there. It would just depend on how the math works (we have the data, right?). In this scenario, 2 is more realistic as the bank may not take a 60K haircut regardless of other market variables. If financing, I would offer 95% of the first lien amount, or maybe 10% less than the lowest documented comparable sales, whichever is more realistic.
It really is a feel-type of exploration when determining how to offer. For the 700K comp scenario above - it is unlikely the bank would take 600K if the balance owed was that or more, the comparable sale for 700K is within 30 days, the unit is in superb condition, the market time is under 6 months... but, to be honest, I would offer a bit less than the balance owed on the first lien and see how the seller/REO bank responds. There are many variants to analyze and obstacles around which you will need to maneuver so the deal comes together. It takes a very experienced professional to help you navigate these markets and achieve the right outcome and investment. Hope this has provided some insight Vacation. We appreciate you as a consumer and customer alike and look forward to helping any way we can. Contact me if needed.