Then decide from there who your going with and just stay the course with them.

You may be ripping up carpets and drywall if it's real bad but still shouldn't be anywhere even close to $48k. 

. * Look for burns in the carpet and on places where one might rest a cigarette, such as a counter top or fireplace mantel.Note: Cigarette smoke will leave a yellow tar residue that can be easily seen in furnace filters and on cleaning wipes.

Stay out of the big cities and try to find areas that have several small towns that tend to be fairly close to each other (say 5 or 10 miles each. 

Not sure what is underneath the nasty carpet.

The owners would like to stay in the property and rent.  

I stay away from all the market type stuff where they are shopping the asset and sitting on it trying to throw tons of buyers in to push the highest price.

House is still in tack (everything works), but rough conditions (worn carpet, old paint, etc..).It's all paid for. 

She wants to stay where she is for undertermined of time after closing until her new living arrangement is set and has agreed to sign a lease at closing.

I'd stay away from there.I'd try a lease option.