Houses that sustained fire events have long term consequences including structural damage and mold that results from water intrusion required to extinguish the fire.

@Michael Plaks When there's uncertainty, there's an element of human nature that loves to be provided with certitude.

Some damage from WDI, which seller will have to address this before close.Seller is paying all closing costs, survey & title, they did a rate buy down to 5.49%, and a year warranty. 

To me the biggest issue with out of state investing and long term rentals is that you have to deal with property damages and/or evictions. 

They're still trying to scam people wouldn't that help to keep the damage to a minimum?

Often times when a builder/buyer moves too fast, or is too busy and overlooks a key piece of due diligence, the unethical ones will try the "scorched earth" method and blame everyone but themselves, even when they know it was their own mistake, and they'll see if they can scare you, the seller, the title company et al into paying damages/fixing their problem. 

Are there particular elements (e.g., lender reputation, conditions in the letter, proof of equity) that you look for to validate the buyer’s financial readiness?

I would imagine the best actions would be to immediately fire the management company, pass the keys onto a new one, sue the old one in small claims court for the listed damages.

What steps would you recommend to minimize damages and resolve this issue efficiently?

.- increase in vacancy to 30%, 40%, 50% (this could be a combination of bad luck: one unit water damaged, one unit tenant trashed, and you have to evict two more - on a 10 unit portfolio that would be tough, even though only temporary)- lower rents (for whatever reason, what happens if rents go down 10% or 20%?)