Advice needed to negotiate with bank on a cash offer to short sales

[Ellen Z.]

first time poster and a green hand, seeking advice.
I am interested in purchasing a short sale property.

The seller bought in 2005 for 440K.
short sale listed around 275K about a month ago,
recently reduced the price to 248K.
I called the seller agent to show me the property. So he asked and knew I did not work with a buyer agent.

He declared "dual agency" when he saw me at the property. (I was thinking about asking whether he is interested in dual agency, but before I did that, he told me he is now dual agent if I want to buy this property.... so I take this as he is motivated in pushing this deal through)

The property is filled with "stuffs" (or maybe I shall say junk), has dirty carpets, loud dogs and dog **** on the deck. I will need an inspector to look it over more carefully, but I think it is in good shape and the repairs should be less than 10k.

I believe the comps is about 330K, with the 70% rule,
330K X 0.7 - 10K repairs = 221K.

That's the max price I am willing to pay in cash (cash offer, no financing) for this.

Need your advice on what price to offer in the first offer. Shall I put 221K or maybe a little bit above hoping to get something in repair credit to meet my 221K goal?
or Shall I start with say 205K and tell the agent this is for bank to look at and counter?

ps. the agent informed me that there was only one bank/lender in this short sale. A few shows in the past month, but no offer has been submitted yet, so no idea what price bank might accept.