I just bought my first house about a month ago. The search (despite it being a "buyers market" and having a ton of houses to choose from) took me 13 months to complete. All I could find were run down houses that were in foreclosure.
You're the buyer. It's your money. You hold a lot of power. Offer a low price and see what happens, assuming you are dead set on getting this place and getting it fixed. Don't be afraid to low ball them. What are they going to do? Turn you away? So what. There's more houses out there and new listings each day. In my tri-county area there were about two dozen new listings each day.
Fun fact: I checked out a house that was going for 179,000. When you open the garage doors, it would poke holes in the drywall ceiling due to improper installation. The electric was absolute chaos and in extreme need of upgrades. There was a huge closed in porch addition that was sub-par and only half finished. The ceiling fans were missing a fin or two each. In the living room, there was a large circle cut out of the carpet thanks to an enraged ex-wife. None of the closets had doors. Only one bedroom had a door. There was a hole in the one bedroom wall. The bathroom made county fair porta-potties more desirable.
The good? It was at the end of a dead-end street (low traffic... quite awesome) and it was on 3/4 acre of land (albeit, all of it was on a bit of a hill).
I didn't look at that place and think "hmm let's see if we can get a good deal and offer him 10-15k under" like I would do with most places that I felt were slightly over priced. I offered him 89,500. All I could see where dollar signs. Everywhere. The magnitude of work and renovations would have well exceeded our left over monthly budget had we gotten a mortgage for 179k @ his asking price. Ultimately, he turned it down, the place got foreclosed, and it sold for 110,000 to a guy who renovates houses for a living.
If your heart is set on this place, you need to make an offer that is fair in your eyes. It's your wallet. If they don't accept it, walk. There's more out there.
(I'm saying all of this assuming the place is worth fixing, but when I hear "foundation issues", I admit I do get nervous about that. I'd lean towards looking elsewhere)