But assuming you complied with your duty to provide the written list, I would say most lawyers will agree that the maximum penalty amount you need to pay is double the amount that you "wrongfully withheld."

You did not agree to paying $1 per 2x4 stud, or $4 per stud, you agreed to paying $xxxxx for the scope of work to be completed.

I have to agree filling it in would solve your repair concern and appeal to more potential buyers..

Is this usually the case in other areas of the country, or does it vary?

I agree each property will have components of different age, but doesn't their estimate assume the best case of brand new components with a full remaining life?

I agree with @Tony Suniga, get an appraisal done. 

The seller has agreed to set up an escrow account to withhold funds to cover the lost rent moving forward.

I agree with the poster above ... business with a concentration in Finance would be my first pick ... it applies well to RE, and it also "travels well" if you decide to initially pursue a job outside of RE ...

That caused a delay in the sells by companies like Country Wide. 

While driving for dollars in one of the most affluent areas in the country (Potomac, MD) I found a for sale by owner sign.