I don't really feel it's appropriate to give too much information online until we have worked something out with the owners, but I'll share about our experience at the house last night.
Our first thought when we walked in is that it needs more work than we anticipated... but we weren't surprised at the same time since they had come down on the price so much in such a short period of time. It's nothing major... just some finish out and a few other things. It's nothing that we're scared of. The only downfall is that because it's not finished, we can't even consider an FHA loan (and we don't have a downpayment, closing costs, etc for any other kind of loan). So, we are going to try to work something out with the seller. We came up with a few ideas with the realtor and she's planning to talk to their realtor today... so we'll see what happens. It's ultimately in God's hands... if this is THE house, it'll work out. If not, it won't :). I hope it does, but I'm okay with whatever happens.
After we spent some time looking at the house, we felt that it was a GREAT house once it is finished out. It has 3 bedrooms, a living room, an extra room (not a bedroom), a dining room, and a nice (but small) kitchen. The only downfall is that it only has one (small) bathroom. But the realtor thinks that the house is closer to 1800 square feet, not the 1491 that is listed because they added on an additional room (which is right by the kitchen and is PERFECT for a playroom/office)! We asked our realtor if it was worth pursuing further and she felt that it would be a great investment for our family. Once it is updated completely, it would be worth up to about $175,000 (or more even) when compared to the other houses in the neighborhood. So, it would be worth almost double. And it's a really great house and really great neighborhood (she also went on and on about how great the neighborhood is!). It's a quiet, clean, historic neighborhood. I think it would be perfect for our family :).
BUT, again, I'm not assuming that it'll work out... we'll just see :). Hope to be able to update again tonight with more info!!