In the 1st Quarter of '08, the recorded sales in zipcode 19064 averaged 97.3% of the asking prices, (See page 25 of the referenced report) so I suspect you will end up closer to $260,000, when everything is said and done.
Good Luck. Feel Free to contact me if you need any more help understanding the local market conditions.
On another more personal note, my first home had 4 layers of wall paper on every wall, inside the closets, on the ceilings... an old hot pink bathroom with an avacado tub, and the previous owner smoked for 50 years in that home with the windows closed!!! But we were wide eyed and eager to buy and bought the property at market value, not a deal or a steal. We peeled every layer of paper off of those walls. We removed the 1950's red velvet paisley, 1960's psychadelic daisy, 1970's silver and gold flecked design, and finally the last layer from the 80's. The wall paper was the easiest job but when we were done a year later, the house was spectacular and when we sold it we made such a great profit I never had to remodel any of my future homes.
Lesson here is: if it makes sense, go for it particularly if you are in it for the 4-5 year plan.
First, determine what the home is worth based on the current market. Your realtor can help you with this information. Next, make an offer that fits within your budget and won't make you "house poor" right out of the gate. Remember, you have cosmetic changes you want to make, and you'll need time and money for that. Negotiate with the seller and agree on a price that works for you.