Odd situation that I sure could use some help analyzing

[William Wilson]

I have found a home listed for 89,900. This home is located in a very nice neighborhood and was appraised at 89,000 last year. Now I have found that homes in this area's values are skyrocketing. It seems last year when this home was appraised was at the bottom of some kind of slump in the area. The estimated appraised value of this home at this point is somewhere between 110-115k now. This is a bank owned property and the BANK listed it at 110,000 a month ago and has since reduced price two times to 89,900. This home is also eligible for a Homepath Renovation Mortgage. I have gone and took a stroll around the house and gathered all I could and there is very very minimal work to be done (painted garage, replace front door) But the interior looks brand spanking new aside from the fire place. Unless there is some sort of structural damage. This is really confusing me and I need some help. Also, I could get into this home for 2700 dollars. Adding on one more question, If I pay 3.5% down as an owner occupant, is there a time limit that I must wait to sell the house? Any help would be appreciated!