I am not a realtor - just a regular knowledgeable buyer and I have been watching the Fremont Warm Springs and Mission market for some time now(about 2 years) to get into good deals. Most of Warm Springs home comparable to the property you mention are listed in the range of 675-750K initially and then drop about 25-50K depending on the market. Even in the height of seller's market the prices were in this range(comparables); just that the houses may sell fast. Having said that; more properties are coming/expected on the market due to school season, pending recession fears and economic woes. I have observed that better properties on market are coming and staying longer giving the buyers a fair selection choice - for those who want the best value for their buck. I agree with other realtor pros that you have to compare the net cost of getting into a house after fixes/repairs and not the initial cost because when you want to sell the house back - that is what you are looking at. I myself have checked the other properties in Warm Spring and feel there is a much more value in some of them. Compare your net cost to bring this property to level with what another buyer may readily buy and see what else you have in the market for that price because then you are not spending your time and effort in the upgrades. You can always back out from an offer if you feel uncomfortable in given circumstances(looking at near term outlook) - because no one can predict the future outlook.