Sorry you didn't get the house, Sizz. Sounds like you would have had to build a house around the fireplace. Is that legal - to go with a lower bid? Odd. Maybe something better will come along. HUD might be another resource. Re looking in a rundown area for a lower price - I was shocked to learn, in some cases, when a homeowner can't come up with the payments & the bank is going to repossess/foreclose, the homeowner sometimes takes revenge & "trashes" (wrecks) the property, even in the best of neighborhoods. I've noticed doors that look like they had been kicked in & patched up, & put up for sale. People do strange things under pressure.
Re realtors - I had to fire the last one who told me it would cost me $30 to close. I knew that was not correct. Plus he was one wacky guy. The last property I sold, the realtor strongly urged me to take the first offer as it might be the only one I get. I never should have listened. Saw the property I sold, come up on the market at a much higher price & gone/sold in a very short period...btw, beautiful area, perfect condition, upscale neighborhood, well manicured/maintained grounds, all the bells and whistles.
I've been looking for another property for a few years & nothing is available here that I would/could consider even though my property has almost tripled in value. Have even thought about getting out of L.A. & relocating - something I don't really want to do. Have seen ads run on tv for an 800 no realtor phone number. Don't know how that works & if I'd be taking a big risk. I feel "stuck" and frankly a little depressed. Sorry - don't mean to go on and on here - but it's probably one of the most important and costly decisions I'll ever have to make. So...go slowly & hold out for what you really want.
P.S. If I never see another carboard box again, I'll be a happy camper.
Best of luck, Sizz.