Bought tax deed, now foreclosing on the property

I purchased a tax deed 3 years ago and did not do ANY due diligence in terms of researching the property. Turns out that the owner has passed away, and the estate has no interest in redeeming the lien. Anyway, I'm now coming to a decision point:

1. Pay off the outstanding $5000 in taxes so the property can go to auction

2. Let go of the $800-900 that I paid for this deed.

It looks like the properties in the zip are selling for approx. $25K. However, from what I've seen in Google Earth, the house looks in pretty bad shape. 

Any advice for me?