Double the highest estimate, then lower your offer that much. Throw in another 15k for good measure. So if they are not willing to lower the price by 75k, don't budge. Call them back in a week, with another 25k knocked off. My bet is that they might even take your -100k offer the next week.
But if they don't, lower it another 25k one week later. They will get the message, sooner or later that basically, this is still a buyers market, so why deal with that hassle, unless there is a big enough payoff for it to be worth your while.

1. I would not rely on one estimate unless I was married* to the contractor, I would always obtain three estimates.
2. I would not take on a house with severe water damage unless I was married to the contractor.
3. In today's market on Long Island, we are spoiled for choice, there is no need to take on a house with sever water damage even if you are married to the contractor.

Unless you already own the house, then of course, I would get it fixed (see number 1 above).

*not meant in the literal sense