The fact that it wasn't disclosed may be an indication that the seller has something to hide....
NEVER FALL IN LOVE WITH A SHORT SALE...you will very likely get left at the alter.
Flooded. Yes, I've heard about that house. We all have. The neighbor you encountered over the week end and reports the house has flooded twice. Reality is the toilet overflowed and water did soak the master suite. That is not a flood.
A flood is when the Oneida River occupies the lowest 7 feet of the house.
Let assume we are talking about a real flood...and you really understand the need for flood insurance.
With the guidance of your knowledgeable inspector AND contractor, the existing home must be assessed for any observable damage or residual damage from the high waters. Now, calculate the costs you MAY incur should the horror stories spun by the contractor and inspector come true. Do you have the bandwidth to overcome such challenges should they arise?
If you have a low tolerance for risk, and the acquisition cost is close to market value....you may be on your way to owning a money pit.
On the other hand, if you are getting it for 40% of market value and that cost is in the bottom 25% of the value ceiling of that community, you are looking at a great investment, but will need CASH, CASH and CASH.
So it all depends...and love has nothing to do with it.
It makes you do crazy things.
You can certainly walk-away; do you want to?
Don't spend any money on Inspections or Appraisal until you have a Contract.
You might ask a contractor to advise what re-furbishing would cost:
Is there mold along the baseboards?
Does the house smell?
Are there warped floors? (try rolling a marble across the floor)
Think about making a decision without knowing what you're getting in to.