Here's the situation.Seller asked for conventional loan only.We bid 196k in a conventional loan. 

A couple small pieces of advice when selecting contractors I would offer which is used in the commercial world is to always make sure you have (3) bids per job and level their scopes of work to make sure they are ‘apples to apples’.

Usually doesn't the bank just bid on it that day and take it back to unload later?

They mentioned that getting contractor bids is typically the biggest sticking point.

But there is a LOT of work you need to do beforehand - determine if property is occupied or vacant, what liens are on the property, try and estimate the renovation costs without seeing the inside, looking at comps, attending a few auctions to get comfortable with the bidding process, etc. 

I schedule subs, get bids, list properties, sit on open houses, do marketing, etc. 

Figure the worst possible costs and bid on a deal that assumes the worst will happen. 

The formal work bid that comes from him will need to show an itemized break down of the total cost of repair between labor and materials. 

However prices vary from state to state and even city to city, so I would get a few bids. 

Her having a nice new kitchen (if she cooks at all) will make everything much more tolerable; for you both.Also, a 203k will require you to have bids from licensed contractors, and they will have to do the work and the rehab funds they escrow will be distributed to them as they prove completion of specific jobs.