REO Experts & Asset Managers replies welcome!

[K Confid]

Question about realistic offers accepted by banks in this market. I've found a great possible property, retail value (?) about 700K, had been posted to sell at 569K, but I believe the mortgage loan might only be for about 207K per county tax records. It has already been taken back by the bank about 6 months ago. QUESTION: will banks do deals to get it off their books if the offer is less than the outstanding loan amount, or will they NOT because the retail value is significantly above the loan amt and they will wait to see if they can make money on it instead?

REO investors - what would you do?

More info....

I want to use this as my primary residence, so I would rather put in a bid as low as possible, and if the outstanding loan amount back to the bank is 207K, I'd like to come in under that, but the house is worth much more.

Also, since I must sell my current residence (plan to do so as a subject to so I get a decent amount in this lousy market) would I need a purchase contract in place on my current residence? Re: proof of funds to go with the offer, I'm hoping that the current bank will finance the loan, what would I use as proof of funds? send personal income/asset/liability balance sheet?