He did not appear to have driven by the comps because the photos used in the appraisal were the same photos that were on the MLS (same flowers on the bushes, same sky, same exact brown spots on the grass).2.  

Make sure to crawl around and bring a contractor or inspector.

Don's insight is spot on.

@Shea Alexander and @Ned Carey are spot on.

I ran into an open house very accidentally and I was so fond of that house that I signed an offer right on spot!

You'd want to know if the line is sagging in certain spots due to erosion of the concrete, any offsets in the line, cracks, root intrusion.

Your advice is spot on!

My budget is right around 350k is the maximum I could afford I have been looking around for a few months trying to spot a good deal.  

If I can self finance both the purchase and repairs I will be in a good spot to do it again in a year or 2.

So I would expect for the seller to tell you to take a hike, and you wont have to worry about your offer.Regardless of the repairs costs, unless you have reason to expect the appraisal came to the value in error (bad comps, errors in the specifics of the property, etc), than the $340k number was never going to happen.Sounds like the property has multiple problems, and it sounds like your not an expert at spotting these and have to rely on contractors, I would recommend you run from this property.