Ok, I got my first counter offer.

I made an offer on an investment property in Indianapolis, IN last week, and the seller (relocation company), counter offered back and I agreed to it.

From what i hear from other people bidding on HUD properties is that they submit bids that is HALF of the asking price then working with a counter offer. 

They accepted the seller's counteroffer of $695k!

Remember, everything is negotiable in a sale so "not paying closing costs" can be part of any of your counter offers and would have nothing to do with it being a FSBO or not.There has been a lot of good advice already in this thread, and I agree with @David Faulkner, if you're asking these questions you should probably get an agent.If you get a good agent working for you, it is worth every penny you pay them.  

What do you believe is the first thing to consider when offering a offer and counter-offer?

They were working on a counter offer for the top 3 offers. 

Never offer the price you want to pay, because there is almost always a counter offer.

Submit an offer that works for you and expect to receive a counter offer.

We then provide three options for tenant to check off: 1) accept 2) reject, this is X days notice (per local law) that we will be vacating by (Date) 3) we propose modification of term as follows: __(counter offer or ?)