Ok, so let's address some possibilities one by one to see what is likely.If you found out that there are material defects in the property (which you have) then it is entirely appropriate to ask for some form of "fix" if strategically it makes sense to do so.It is possible that the agent is reluctant to include your request for a price reduction commensurate with the level of damage to the property for a variety of reasons.  

The details of the scope of work and the details of the contract of what is considered a hidden defect or to be dealt with as a change order of the other contractor would have told you this.

The property would have been condemned without the defect cured.

If there is a defect in the loan it may not sell at all.  

@Tim Sutton - I think a lot of the numbers look very solid, if there are no major defects in the building such as weird layouts, or missing elements, then your next step should be to get a close inspection of the plumbing to make sure you won't be replacing all the pipes in 5 years, check the electrical to ensure you have good electrical panels and modern wiring, get a timeline on the life of the roof, and make sure the foundation gets a good look.If these major ticket items are fine, then I would say to get this one under contract and start moving forwards.

We didn't close as scheduled as they discovered a defect in regards to title that needs to be cleared.

HUD comes, and many REO's have huge title defects that can take a long time to fix.

They can also quantify the costs to correct the defects, and they might even find stuff that the inspectors didn't find.If you have your purchase contract written with an inspection contingency clause, you can back out of the deal if the problems cost more than you budgeted for rehab.

They will show you every little defect because they assume you are there to help them and will love you.  

Did they give you a Residential Property Disclosure listing any major defects?