Oh boy. So bid is in. We will end up with this house if the following go well:

Sellers accept the contract
Bank approves the bid (this is a short sale)
House appraises for the bid amount
Home inspection goes well

Yuck.

There are no real comparables for this house. Fully remodeled, it would go for a lot more (add another 100k+ even in a down market and they go in less than 5 days at that price). Big issue, its not remodeled. It needs lots of work. It also has a basement and the cheaper homes in the area do not. So our Realtor isn't sure it will appraise high enough. Not that she thinks it will appraise low, she just doesn't know what they will appraise it for since this neighborhood doesn't sell homes very frequently.

Bank approval of the short sale should go well, the other agent just had a contract fail at that number due to down payment assistance disappearing as of Oct 1. Incidentally that's why we made the offer there. It is a discount of 8k and if it doesn't appraise there, it will quicker to have an appraisal come back too low then to have the bank reject our first offer and then go through the whole process anyways.

I am really not too worried about the home inspection. This house is valued so low and has so much potential that its a steal even in this market. But the missing water heater will need to make it back there before inspection. This was a rent to family while we buy a new house deal that went very wrong. On a positive note, that means that the sellers are in a better position to help out and the utilities aren't way behind as a result.

Wow. This is going to be a major project. But definitely worth it if we can manage to get the deal to go through...