There are so many loopholes and bear traps that these REO banks put their documentation when buying foreclosed properties. Here is just one clause that I use to protect my buyers as much as possible:

Buyer and seller agree that if property is condemned, loses its zoning or rental license, has new code compliance orders issued, or otherwise changes status with any governmental jurisdiction prior to closing, the buyer may cancel this agreement by written notice to the seller’s agent and all earnest money will be returned to the buyers.

This clause is especially important when dealing with vacant properties in Minneapolis or Saint Paul.  Occasionally between the accepted offer and the closing, the city can come in and slap the property with a vacant building fee or more code compliance.  You want your customer to have an out if those costs could be too high.