Is the title marketable with a $675,000 purchase price or is the seller paying the difference from the insurance proceeds? It sounds like there is more to this story. The house could be repaired and sold without the owner putting an ounce of energy into the repairs. The insurance company would pay and have it completed by others. Was he not insured properly and now he's facing a problem of finding the money?
I'm not experienced in this arena but would consider the economy in the Columbus area. Are there big corporations moving in/out, medical facilities in/out (basically, evaluate your potential buyers lifestyle and see if there would be demand). Also, what are your thoughts on future interest rates as they would have a big impact on a sales price in the $1mm range. Can you afford the large carrying costs to ride out a slow market? Why don't you just move into the house, fix it, and sell it at the best opportunity?!?!
I'm in Cleveland (the poorest city in America) = Little supply of expensive homes/people to buy them.