When I am looking at HUD's, I look at the appraisal value and the list value and the tax accessed value. This will tell you how bad the property truely is, compared to what it used to be. Then look at the list date, this will tell you how long it has been on the market and how much you should offer after you do a walk through. Since the price has already been dropped from the orginal value to 72,5, its been on the market for sometime, but this does usually mean they will take a low ball offer. HUD updates their prices usually twice a week. The note about the 5K in repairs you can discard. If you look at the bid stat's for your county, this will tell you what type of offers they have accepted in the past.
I have found that they don't have a clue as to what a home needs. I looked at one a few months ago that said the same thing and it was completely trashed with raw sewage in the basement and the whole house was full of mold. The house should be leveled after Hazmat gets done. They were asking 24K for it, county still had it assesed at 67K. Yes, you can go to any bank and get a home loan on it, just not FHA or VA.
