Sounds like unrealistic seller and broker/agent has a headache from the listing.It's the sellers right to reject,accept,counter the offer.

Unfortunately, you're stuck with what the market will support and trying to price it at 2% is unrealistic.

They might not know loan guidelines have changed, something is on their credit they did not expect, their debt ratio is too high, they are unrealistic about what they can get for the money they want to pay etc.   

Random googling and zillow browsing did not lead me to anything.Any other suggestions that you can offer please do so.And I do hope my plan (first time, out of state investment with property management) doesn't sound too unrealistic.  

I have also noticed that brokers are very unrealistic with their pro formas and they evaluate a deal based off where the market rent is and not what it is currently bringing in.

They either have unrealistic owners or realtors who do not understand how investors analyse and buy rental property.

With investors in the past, I've offered to split the first deal profits but on this deal, I think it will set an unrealistic expectation. 

It makes a buyer's job harder to have to overcome these unrealistic appraisals.

I would prefer to buy within driving distance from where I live, but if that’s totally unrealistic, I’m open to whatever works.Obviously, I need to research and run income/expense numbers on the next potential deal much more carefully than I did on the last house.Also, is it best to look for houses that are in good condition and don’t need much work (i.e. retail-price houses), or are most of the good deals to be found in houses that do need fixing up (including short sales and foreclosures)?

I do them in the 9 Bay Area counties, LA county, San Diego county, but obviously 3000 is unrealistic so the national lenders generally don't do them at all if they are fielding inquiries from all 3000+ counties.Down payment 2nd mortgages and/or grants are not "free money."