End result will more than likely be a sale at auction normally in those type of situations, stupidity has no bounds and at the end of the day they probably wouldn't have any equity after commissions and closing costs.

The only options are for me to wait around for months and persuade the seller (the bank) to file a variance with the local zoning commission, and hope that it's approved, or, i'll need to find alternative financing since no conventional mortgage lender will finance this property. 

@J Scott  as usual there is misinformation running here.. its very common I have found in my dealings in other states for the brokerages to have CLIENT Trust accounts.. and handle the EM... and then what they do is keep it and off set that with their commissions..

Pre-paid legal services is also has a marketing aspect, a sales force with commission paid to originators of plans, not saying Wendy has an arrangement, but it's possible. 

What's standard for commission? 

You are right in the sense that the value you bring to the table is the fact they don't have to pay realtor commissions (6%) as well as ease of transaction from not having to find an agent, make the house presentable, showings with buyers, inspections, and all the nuances that go with selling one's house on the market. 

  I  see it as a potential opportunity for an agent to make loads of commissions, as my buyer's agent. 

If they're asking $95k, ARV is $135k... factoring in 6% commission for the sale of the property, 6 months holding costs and your estimated $8500, I'd be very careful.

There are many posts and discussions on the topic already on here, my quick thought is that it is a fairly quick process to get one and provides you with some advantages in terms of finding your own deals and spending less in commissions if you list your own properties.

I have never made a commission on a real estate sale.