In terms of the size of the discount you can negotiate for, it could range from as little as zero to 20% in special situations. It depends on the skill of your real estate broker in negotiations and whether there are competing bids. A seasoned real estate broker should know when to bid and what terms and conditions would get you the best price with a particular bank. A typical deal is around 5-10% off the list price. Obviously, if there are competing bids, your chances at a deal are significantly diminished and you should consider moving onto another property.
The Seller may be holding out for a very high price, or, they may be trying to attract Multiple Offers.
There is no set formula for doing this.
The most consistant guideline is a Comparative Market Analysis, (CMA), done by your Realtor. It takes all the factors into account and gives you the comparative WORTH of the home.
Even an Appraisal doesn't do that, because the Appraiser is just trying to tell the Bank that the house is worth "AT LEAST" the amount of the Loan.
You need to enlist the aid of a local Realtor to guide you through this process; and the kicker is that your Buyer's Agent is paid by the Seller; they don't don't cost you anything.
Good luck and may God bless
For the most part, the foreclosing bank's asset manager and the listing agent will ask that you submit your best and highest offer. You may have only one chance unless there's a multiple offer situation, and the buyers are asked to confirm, or resubmit an offer to be the best and highest.
you can offer LESS, or MORE than list price. But once you're in contract, there may be few opportunities to negotiate a chance in the price not unless your offer was higher than list price in the first place.
I definitely recommend you asking your agent to pull the comparables in the surrounding area, based on the size and condition of the property. Good luck!