House Hunt update:
The wife just got a message from our agent saying that the agent of the owners of the yellow house had contacted her to let her know that the owners are going to do the repairs and re-list the house, and was giving our agent inside info about it so we can pounce quick if needed.
We've let our lending agent know we want to be pre-approved for $160k, just in case they bump up the price (though they shouldn't be able to go much higher than cost of repairs).
The house was/is currently listed at $155k, and if they just patch the exterior siding, it doesn't add value to the house, since it was already listed near the max for that size house in that kind of neighborhood.
So, if they keep it between 157k and 160k, then we are still in the running for it.
We didn't burn any bridges regarding this house, and we let the selling agent know that we are very interested in the house if the 3 major repairs are taken care of (there are a lot of little issues the home inspector found, too, but we have agreed to take care of them ourselves, should we buy the house. Other prospective buyers might want those other little things taken care of by the owner).
But, we were given a behind the scenes heads up that repairs are going to be made.
Just need to find out how much more (if any) they'll be asking for it.
Fingers still crossed.