How to make offer to bank? How low is too low...

[Lisa Hoyt]

My son is a college student who has found an REO near his campus. It is owned by the bank, a smallish bank located about 40 miles from property. We have been shown the property twice, once to look, second time with a contractor for estimate and evaluation. House has mold, needs a roof and some other repairs to the tune of 35k. ARV is easily 185k, currently assessed at 157k. The bank said that the lowest cash offer they would entertain is 139k. Their plan is to fix it themselves and resell. I am thinking this is pretty inconvenient for them and at 139k plus the repairs, it would be out of our reach. (Son wants to live there - house hacking and have roommates pay the mortgage). Son has cash for a down payment. What would you do? What kind of offer would be taken seriously? Or do you not know until you try? There is no realtor involved at this point. Bank is on record as having foreclosed at 112k in December. They are having their quarterly foreclosure meeting today per bank agent, trying to plan for listing it if we don't have an offer for them. I am going to my local REI meeting tonight for suggestions as well, but they have already said things like "offer 85k", and "if they accept your first offer you started too high". Then there is the matter of financing...but that is a different problem. Thanks for any suggestions you may have!