I recently found a home for sale by owner, it's ARV is around $200,000-$225,000.

I get all the above responses...re appraisals and what goes into them...I guess I was asking from the perspective of how accurate is the sales data as it relates to actual sales that they show?  

We can use end buyers funds to fund the transaction, as long as it's not a short sale and the end buyer is using cash or hard money.

I found a great property that is for sale on a auction.

Some banks like them, some won't touch them.Another thing to watch out for is that if you appraise within the 6 month window the appraiser may use the sale of the beat up house as a comp!

Perhaps in this case the percentage that the Realtor collects for the sale of the home might need to be increased?

^Loaded question.....Most popular methods are direct mail, driving for dollars, auctions, tax and foreclosures sales and networking through local rei groups.  

I have been into the construction business since I was 17 including those college years.Remember that marketing and sales ability are very important.  

My question though is that if the most recent property tax is based on the previous sale price, if your purchase price increases dramatically then wouldn't you get a huge spike in taxes?

This is where if you are gonna be a salesman,you need to use your powers of persuasion.Find their pressure points and emphasize you are there to alleviate those pressures.Take control of the negotiations by gently reminding them that you want to buy but can move on to the next deal at anytime.You have to make them worry that if they don't cooperate and comply with your contingencies,you will walk on them.Why are they selling?