Hi BP, I will try to keep this long story super concise:

My Grandparents passed away last Dec. leaving their waterfront property in the fingerlakes to my mother. The property is a 3 bed 2 bath 2 story plus basement. the property has over 100' of water frontage on the Owasco Lake outlet in Auburn, NY (45 min West of Syracuse), and a private boat ramp. I estimated an ARV of $300,000-$325,000, but in its current condition $250k to $280k

The property is outdated, but completely habitable and clean. when listing the property the basement was still full of my grandparents belongings, so nobody realized the walls were bowing inward. After accepting a full priced cash offer of $265,000 and waived inspection contingency, we hired someone to remove the stuff from the basement exposing the sagging walls. The buyers, with good reason, were spooked, and tried to re trade at $100,000. we declined, and they attempted to breach contract. but the buyers agent never collected an EMD, so after months of back and forth with a lawyer involved we are now stuck with a nice $8,000 legal bill and still no EMD or compensation for locking the house up for over 5 months. holding costs in upstate NY will make your stomach churn.... why does anyone live there? $1,200 a month without a mortgage...

now to the foundation issues, we have gotten estimates ranging from $50,000 to $180,000. most people say we will need an entire new basement, but without removing drywall there is no way to tell the full extent of the damage, and scope of work necessary to repair it. 

moving on. My mother hires a second listing agent. the guy claims to be an investor and flipper, and seems a lot more knowledgeable than the last agent, but I think when an out of state woman inherits a free and clear home in an opportune location with incredibly high holding costs, everyone smells a little blood in the water... hell i would... He recommends that we go for a fast sale for $125,000 to a builder that will tear down and rebuild. A friend of my mothers offers her $125,000 after we list with the agent... of course. 

after doing some light market research and consulting with the agent, if we could repair the foundation, replace a bathroom, and do about 900 sq ft. of flooring, the market could support $250,000. back of the napkin math if this is worth the time to fix it: $250k x 70% - $11,000 for the bathroom and floor - $7,000 holding costs leaves us $32,000 to fix the foundation. 

I guess I'm just generally asking for advice on this one.. it really sucks to be on the distressed seller side of things. Is there anyone that is familiar with the finger lakes market? maybe someone that has dealt with sagging basements? any out of the box ideas to not let this beautiful property slip away at 35% of its ARV? should I surrender?

Seriously thanks for your time and any advice.