The deal seems pretty attractive, and the seller appears very motivated to make a sale.  

I've gone to multiple auctions (Philadelphia Sheriff's Sale), inquired of vacant/distressed properties directly with the owners, worked with random realtors after expressing interest via real estate websites (e.g.

The house is in pre foreclosure and we got the sale date extended for him in order to make it happen.

When a home sale happens the property is updated.Basically, it is an evergreen data of every parcel in the county.

My name is Levi Johnson, my background is Sales.

The article says 20 bids and the winning one "wasn't an outlier," so we have good reason to believe the sales price is ballpark accurately telling us true market value for the home, without even having run comps.Really, what's more likely at play here, is a listing agent that wants to be able to juice up his "average % over asking" pitch a little bit more for future listing presentations.

I know that our sales contract contemplates the security deposits being transferred at closing, which would have been a better time to bring up that the seller did not collect them.

Ask the seller what they want to NET from the sale (the actual amount they want to walk away with in pocket), not what they "want for the house". 

They have a notarized purchase and sale contract where Bob agrees to purchase the home for $300,000.  

Hello Alison, If you want to get paid through escrow I think you need to be licensed in Oregon if it involves the sale of real property or you will be in violation of the law.