What to offer on very cheap property?

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Hi guys, quick question. I'm looking at a property here in Indianapolis for buy and hold, it's a SFH FSBO that has been on the market for a while, 3 months ago was listed at $14,000 and last week the price was dropped to $9000. It is in need of a full rehab and its not the best location. After running some numbers I'd really like to pay around $6500-7000 for it, since closing costs seem to be around $1000-1200. It seems to me that they are motivated because they dropped the price $5000. Basically I'm just wondering if offering about 25% below asking price is an insult or not in this situation. Thanks in advance!