How much to low-ball on a foreclosure?

[Dave Mosher]

I have been noticing a few bank owned foreclosures in my area that have caught my eye.  In your opinions, how negotiable is the listing price and how willing are banks to accept a lowball offer?  I am looking at one that went under deposit in August, came back on the market in late October (I am thinking financing fell through), and now I am looking at it.  It has a huge hole in the chimney that would need to be repaired but overall the rest is just cosmetic stuff.  The chimney hole is in the attic.  I hear about these incredible deals on foreclosure properties but wonder if I should make my offer for 5% below asking, 20% or 40% below.  Also, on a side note if anyone could estimate how much a new chimney costs that would be great.  Thanks,

[Mindy Jensen]

@Dave Mosher , I live in a house that was purchased through the Fannie Mae Homepath program as a foreclosure. FM wants to put in owner occupants, so I had to live in the property for one year. But that was the difference between me getting it, and the other buyer I was up against, who was an investor.

If it's a Fannie Mae foreclosure, they want to put owner occupants in their houses, and will generally accept the lower OO offer. Mine was listed at $199 and I bought it for $176.