Just use your contingency period to provide an AOS addendum with a take-it-or-leave-it $20K discount, less additional discounts for the rest of the items that came up in the inspection, and walk away otherwise.  

Congratulations on your AO! 

I just got another AO yesterday, just before we are getting into early spring market.

A lot of water heaters are in areas with low clearances and you'll never get the new anode in unless its a "sausage link" type.Some supply house heaters will give you other reasons to buy theirs vs big box (Rheem/AO Smith) such as made in America, brass drain ****, and stainless elements vs some kind of alloy.

Do not start this project lightly, I can not stress enough how much extra time, money and patience this will take.I suggest finding a JC architect, with experience with the building department, and get his take on the project, also try to make the AOS so that your deposit is refundable until you have the permits to get this done.

@James Somers I read the little book of index investing, little book of value investing, 401(K)aos (Andy Tanner), power of zero (David McKnight) amongst other titles, and concluded that control and tax advantages favor real estate.

Do I need an AOS first or can i prepare for this as I list the property?

My personal opinion is to always spend the extra money now knowing that real estate is a long-term play......ao far, waiting for that delayed gratification has paid off.Plus, if you did the coach house now you could always finish off the basement now and have an illegal

I also need an AOS for PA.

I agree, you can't go wrong with an AO Smith gas water heater however, id go with the better grade that isn't sold at big box stores.