I'd suggest driving around to get an appetite for the area: it's definitely a street-by-street sort of thing.As I've said elsewhere, I feel like the market here has heated up quite a bit in the last ~3 months, so it's been hard for us to find good deals, but maybe things will calm down in the winter.

When the seller gets anxious at you low balling them, calmly explain how you arrived at your number.  

"He'd lived in the house for ten years", "He didn't want to move...but only got $530/month in disability and really couldn't pay any rent", "There was no way he could move in 30 days because he is constantly in the hospital", "He was going to end up in a homeless shelter if I didn't give him more time", etc.I was nice, I was calm, I patiently listened to it all without interrupting, I was sympathetic. 

I would calmly inform him that you have already paid for damages you were responsible for and that there is nothing showing the termites were due to your (lack of?)

You need to go have a calm chat with the city. 

@Bryce Young  depends also on how hot your area is.. will there be competing cash offers if there are your chances of winning the bid are not good.. this is what happened in Vegas finance buyers were getting shut out by cash buyers to a very large extent.now I think Vegas has calmed a little.. but that's something to think about as well.

I calmly explained to him several times that it was his error that he could not deliver the loan as promised, and he had to find a lender with less favorable terms.

What can you say to calm my fears of you closing the doors in 6 months?"

@Jared Garza Ahh the adrenaline, stay calm!

It will be good on your end to remain calm and professional.