I even offered to switch our RC policy to ACV so that replacement wouldn't be factor in the event of total loss (bank gets paid and we sell/demo the land).

@Allen LiTaxes are going to be the biggest factor that can be far different property to property across state lines.

I work in the travel and lifestyle industry in the Greater New York Area although I reside in the Northern New Jersey suburbs.

Your DTI might be a factor, but if the home is your only debt, your DTI should be fairly low.

Your lender will always factor in minimum payment only obligations to DTI, so they will factor in the whole lump of debt, but the monthly payment is how they consider the % of income to debt.3.

The seller's reasoning shouldn't factor into the decision.

The difference between your contract price and their market contract price will likely be a factor in the judge’s mind.

Make sure your cash flow analysis takes these factors into account.   

I feel there are a lot of factors to consider. 

We explained the 50% by saying something like "obviously we expected some surprise findings to come up after purchase and factored that into our initial offer price.