1. This REO bank owned house, listing $350K and the bank would propably go for $300K after the negotiation. There maybe a way to push the price to as low as $280K.
2.There are a lot of interiors to be repaired or upgraded. The observed areas to be worked are: Kitchen, Bathroom, Air condition, Floor, Fences, Windows/doors, and paint. The total estimated costs of all would go somewhere from $35K to $50K. However, there might be some hidden costs after inspection (not certain). There is a chance that final repair costs could be more.
3. This house has been listed in the market since Sep’07 (4 months by now).
4. The prices of Comps in the area range from $320K to $450K.
5. It’s a Single Family Resident house.
I’m planing to live in it, not flipping or renting it out.
It depends on your plan. Are looking at flipping it, renting it, or living in it? Long term occupancy of the property is the plan that will entail the least amount of risk if the home is well located, suitable to your current and anticipated needs, appropriate to the neighborhood, and is basically sound in its floor plan and structure. It might also work out as a rental if it is in a good rental area and rents are increasing in your community (as they are in many locations). The most dubious scenario is if you are looking at quick repairs and a subsequent sale; a "flip". You might find yourself installing granite counters on the Titanic; improving a house that is decreasing in value. This is particularly risky if you are highly leveraged and need to turn it around quickly. Real estate is local and then it’s even more local. Make sure that you have a good sense of the value trend in your area and particularly in that neighborhood. The comps you mentioned with such a wide spread ($320k-$450k) tells me that there needs to be a more refined analysis of current value. The spread is just too wide. Not every nearby sale is a true comparable sale and a similar house nearby is not truly comparable if it’s across a freeway, in a different shcool district, or somehow otherwise distinguishable. Be rigorous in your analysis before you commit your money and swing your hammer. This is where a good local Realtor comes in. I hope you are working with one already.