It is for sale has been on the market 42 days with a price reduction. 

Just send the notice and simultaneously asking for whatever price reduction you want.

My advice to you would be to start using one or two of them, get to know them, and then start working on point and interest rate reductions.

=)If you think it is a matter of them not believing you about the cost of your unexpected findings, I would supply bids along with your reduction request.    

It has been listed by the bank and had a recent price reduction the beginning of April 2014.

AND it always gets a price reduction is asked before asking price. 10) I want to know if the seller is in fantasy land or reality land...

For example, "improvements" won't be written off entirely this year, but you will want to keep track of for depreciation and capital gains reduction if you decide to sell.

Refinance events are split the same way with a reduction of their capital account which reduces their pref basis.  

Once she could see the reduction in tax liability and the cash flow she could start to see the benefit of me being a full-time real estate agent and have more time at home with her and the kids.

That way it is a direct reduction in the amount of money you need to bring and would not be considered income.If that is not an option it would depend on your personal finances.