Wanting to make an offer

[Everett Marshall]

I have my eyes on this REO I saw on the MLS, the bank is asking 79k for it, it needs work and I haven't laid eyes on it. I plan to go do a walk through with my agent this week. My question is since I know the house is in a good area with great school district, should I offer below list price. I read somewhere a while back, my offer should be so ridiculous that I'm almost afraid to offer it. I don't know if that's holds true in today's market. Can anyone help me with that?