First of all it's very rare a seller gets a buyer's EMD deposit for buyer's financing falling thru.

Quote from @Jim Rice: Would like to connect with Mortgage Note Investors/Buyers/Sellers of "Paper" (1st/2nd/PL/NPL) in SE USA (primarily AL/MS/GA/TN & Panhandle of FL).

Demand remains strong and rents continue to climb.Great place to invest in rental properties!

@Pranita Maldikar Unless the seller is a family member or personal friend, I'm not sure why you'd want to put that much money down on the property.

A motivated seller could say anything to close.

I initially offered $200K in cash, but the seller countered at $240K.

@Joshua Christensen wouldn't expenses naturally be less if the seller's just spent about $75,000k on cap ex improvements? 

Kyler, call your a couple of insurance companies and get a formal quote so you can take this back to the seller.  

Seller was behind on pay HOA payments and in risk for losing the property.

I'd personally say pulling your water heater out and replacing with a wall mount on demand one, would be worth the cost to have in unit washer dryer if you are staying there or renting it, it would be worth it.its always worth doing the big stuff well and correct even if you are cleaning up after someone, the long term hold always prevails, its just a little frustrating front sometimes, but hang in there!