A good Realtor will work with you on preparing an offer that will win the sellers over.

Lets assume you win in small claims court and they pay court fees.

If there's anything that would back up my point is Dale Carnegie's book "How to win friends and influence people." 

I want nothing to do with leaky faucets while Mickelson is on the 18th hole at the US Open on Fathers Day with a chance to finally win!  

Heads you win big, tails you lose small, but the house always wins, and you're the house.

It is possible that a new 80% furnace is more efficient than the one they currently have so it is a win/win for everyone.  

@Charles Worth realtors that guarantee prices  IE I will sell your house in 90 days or buy it.... the buy it at a price so low no one would sell.. its a gimmick is all it is.these guys are closing on houses... like anything I think they will have wins and loses..but they will need to choose markets and inventory very carefully as I stated above for this to work on those margins.

Once you win the bid, you need to understand that you will not have clear title on the property.  

So, I see the situation as follows:I have gotten a quote from a reputable builder (award-winning) for $125-$130/ square feet.

Someone actually bid on it and had to deposit $7,500 but then didn't deposit the winning bid.