Best way to make an offer on an as-is REO

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We are interested in purchasing an REO property that is in a good location, but needs a lot of work. We've already had an inspector come out; however, the utilities were not able to be turned on. We already know that there are plumbing issues, so that won't be a surprise to us. It's a 112 year old property last occupied within the last few years (not in a historic district and not uncommon where we live), so the foundation was the main reason for the inspection and the foundation is good.

It foreclosed in Nov 2016 and was purchased by the bank in July 2017 for $97,000. After a few price cuts (and 144 days on the market) , the listing price is currently $82,000.  It is a small town, so it's difficult to find any comps for a property that was purchased in a similar state of disrepair.  The average cost of a move in ready property in that area is about $140,000.

My question is about making an offer.  With all of the supporting paperwork from the inspection, I'm interested in getting some opinions about how low is too low without being offensive.  Also, what clauses would be recommended in this situation.  

Thanks in advance.