Vees one thing you can do is ask your agent to send you a list of all the properties in distress within a certain radius of the home. Or pony up money and use foreclosure radar. If the only sales were foreclosures then it is a reasonable presumption that future sales will be foreclosures. Furthermore there is a high probability that other homeowners have had loan mods.
If your concern is depreciation then you need to figure out if you are in a neighborhood that has a lot more potential depreciation. No matter how many upgrades the home has it will always be dragged down by the neighborhood based on what you said. You always want the worst home in the best neighborhood not the other way around.
I think another factor is how much money are we talking here, what is the difference in the appraisal and your offer?
Have you already tried to ask them to reprice? You should at least play a little poker and see if they call you. Is it a resale or an reo?
