Since they did not willfully damage the property, we decided to give mercy and decline getting a monetary judgment against them. 

And then imagine what sort of damage might be inside. 

And, if something goes wrong with your financing and/or something happens at the property, the seller could claim that you damaged his property, failed to close, and make a monetary demand - or even charge you legally with trespass/more. 

Remember that security deposits are for damage and do not cover reasonable wear and tear.

I am no expert but some issues you might want to look out for:- Mold in crawlspace/basement (as well as evidence of running water during storms, we've seen this)- Structural damage/settling (definitely hire an expert on this one)-Improved Electrical/Plumbing (These systems DO have a lifespan and the older systems aren't as reliable as newer ones)- Asbestos Flooring and Tile (Where I am from the removal of this stuff is mandated by law to be done by a licensed professional, no DIY.

Asbestos shingles are fine as long as they aren't damaged (cracked or chipping)2.

Move on.If you file a lis pendens without cause they can sue you for treble the damages in many states.

At that point, the money is transferred and the damage is done!

Also get it in writing that they are responsible for any damages done as a result and need to leave the left over paint for touch ups. 

As owners, we want to make sure we are charging enough to cover any possible damage, but usually first month rent is a standard security deposit on a 12 month lease.