Aside all that, as others mentioned, you didn't lend enough info to give any specific answer to your specific situation.

The buyer's agent, though excellent, was new and unsure how to handle the situation.

And as you can read here on BP this is probably the number one recipe for financial failure. 

We were in a financial position where we could keep our existing home, upgrade, and purchase another home.

Just stay flexible and be ready to adapt to market changes or your own financial situation.

Depending on your exact situation, you could likely get something closer to 7% and make these numbers work a little better.  

Looking for some input on how others would approach this situation. 

Given your firsthand experience with the Alabama market, particularly with septic-specific considerations, your insights would undoubtedly provide a more accurate perspective on the operational and maintenance costs affecting this asset.Even with the available information, there are still substantial assumptions and speculative elements that must be integrated into the current and pro forma financial analyses to provide a meaningful valuation.

And frankly in many instances depending on the situation it could be beneficial for the owner to let it go.. as they are entitle to the overages..

The more rentals you have the more risk there is to having a bad situation crop up.