mod45, I think you moved faster than the other parties in the transaction. I realize you discovered the issues before the other party had a survey completed. Sure the broker should understand your offer. However like Real Estate greed may have set in and the broker was hoping some of the things you brought up may have been over looked or at least discounted.
However you were way ahead of everyone. Seller and existing buyer still had a higher number at that point. If I understand what you posted. A higher number with an unknown may have been better than a lower one with know issues from a non-surveyor.
No one may know at this point either. Except the broker and the seller. Unless you are in contact with them.
Some times logic is not part of the deal. Seems illogical to me.
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