Or, are they an inch from bankruptcy that could effect your interests?

When we spoke with the inspector he said that there was a major drainage problem [by the smell in the crawl space that makes sense] and that the foundation on the 1930 home had shifted about SIX INCHES.

Go over every single inch of the home.  

1: The house had really appreciated since I purchased it (not a good reason), 2: The neighborhood might be transitioning to being a better area, though it is one of the lower grade neighborhoods in this city( a Toss-up), 3:The house has a big problem- 1 bed 2 baths on the main floor and 2 beds in a basement with 6 ft 2 inch ceilings and a beam down the middle.

I had a fairly severe leak in my kitchen in a bi-level in Dearborn Heights, and I put a yard of topsoil starting 6 inches deep at the side of the house and dropping 1 inch per foot away from the house.

I'm guessing you want to raise the floor 6-8 inches?

They will sell to someone who waives it.Your best bet is to walk the house before making your offer and spend a lot of time looking at every inch of it.

What color and width (3, 4 or 5 inches) are good and attract buyers? 

We didn't change the layout, but almost every square inch of this place was new or painted.

Depending on how bad is the foundation state (how many inches you have to correct), is very possible the sewer line will disconnect/break in the horizontal portions.