The lenders ive spoken with might finance a loan for let’s say 250k that acts as a credit card.

I should also give credit to some of my BP colleagues who have helped us thus far. 

We are planning to replace them either way (estimated cost of $50k total), but I'm wondering if we should go back to the seller and ask for a credit?

If this is a concession, then it should be a credit at settlement and there would be no need for escrow as @Mike McCarthy indicated.

Banker told me i could either do a Cash Out refinance or that I can put it down for collateral and get a Line Of Credit.

If the lender was willing to lend 100% of the purchase price, you wouldn't have to circumvent that by having the realtor credit the buyer 25k.  

I had a perfect credit score of 780, it's all gone now.

About 1/3 of the deals fall through at their end because people "have stuff happen" in their lives like Job Loss, Lose Momentum getting credit cleaned up, Medical Issues, Divorce, "Changed their mind", Don't REALLY want to be home owners, etc.

A credit history.

I just don't want her to put everything on credit and then end up upside down on the house and in debt.I would gladly buy the property from her and renovate it myself but I don't have the finances to do it now.