The fact that REO properties are always AS-IS has nothing to do with the fact that many sellers of real estate are offering their property subject to inspections and negotiations on treatments, repairs, and replacement.   

Updated all lighting throughout, paint, exterior and interior, cleaned up landscaping, added new sod and landscape lighting stained all decks, window treatments, kitchen hardware, updated furniture and excellent photos.

Luckily, the exterminator found no evidence of them in any other unit and it was only $980 for the guaranteed treatment.

Needed paint throughout, every faucet and toilet replaced, new stainless appliances, total exterior face lift, new hotwater heater, new textured laminate flooring, crawlspace treatment, and over all attention to derrered maintenance.

Wastewater treatment?

Don't completely waive it forever because that could lead to discrimination cases.Never give special treatment to any tenants.

I have a potential tenant that has listed a treatment center as a former living situation (he was there for 18months prior to the existing 18 months somewhere else). 

You guys are all in this boat together, you shouldn’t expect special treatment for your money. 

If so, it would not qualify for 1031 Exchange treatment since it is used for personal use. 

If you are scared/nervous then arrange for a treatment, figure out who pays (see your lease) and get it going.