Help with a possible

[Minna Reid]

Ok so a guy ends up with this house through probate. Old house (1900) needs some work. With an ARV of 170, repairs at 50 I was willing to go up to 70. He won't take less than 80. Says he put in 77 to get it out of probate.
Doesn't sound too good EXCEPT the old house sits on a 1.3 acre lot where zoning is for .25 acre lots if connected to public water and sewer. The lot is long and narrow and the old house has a septic currently so needs a full acre. I could connect to city water/sewer at the street (it's a long stretch - house sits at end of long lot).
1/4 acre parcels in town are running in the 50k range.
If I can subdivide this even into just another lot or two theres money here, but I have no idea how to proceed to figure out whether I can or how I would do it, and I have to get back to this guy in the morning. I'm also nervous because he is a builder. Why has he not subdivided this if he could? he says he just bought 400 acres in Maine and is moving to build there and just wants out of the property.
Help me out here - what do I do now?