How to tackle Home inspection issue after contract

[nss_be]

Hello All,
How are you all doing?
A couple of weeks back after negiotiation with seller I signed a contract. After that I did a home inspection and found that the house was infested with wood boring beetles in kitchen, utility and master bath cabinets. The pest inspector told me he will consider this like a structural or foundation issue. When enquired in homedepot they gave me an estimate of 20K to replace everything. Only cabinets were infested with beetles not any other structures in home. Yesterday I send out a termination notice to end my contract and my earnest money back.
Now I told the problem to the seller and send him the pest control report also. But right now he is not willing to reduced the price. Even I asked to reduce 10K but he is not willing to do.
I and my wife love this house and we need this.
Not sure should if we should buy the house or leave it to a next buyer.The seller told that there might be a buyer who will buy it without noticing the pest infection.
Please help.Is there any strategy should I follow to bring down the price?
Thanks in advance
Shawn

[Rusty]

Hard to know the exact situation, but sounds like the seller is a little crazy. Now that they know about the infestation (presuming they didn't before) they'll have to disclose that to buyers.

It certainly detracts from the value of the home, and unless they were already priced below market value, you'd expect them to deal a little.

There are probably cheaper ways to fix this than Home Depot, but it'll be a headache. As much as you l'm sure you love the house, I'd encourage you to think hard about what you're getting into - even if you can get the seller to lower their price.

[VegasRealEstate]

I would make one last effort with the seller. Advise them that now they know about the existing problem and they are required by law to disclose it to the next buyer. You are being more than fair by only asking the seller to lower the sale of the house by 10K. If they don't want to, ask them to replace all the areas of infestation and see what they say.

[nss_be]

Thanks for the replies.
I spoke with the seller and he said the house is as is and not willing to fix it or reduce the price.
Right now the accepted offer was little less than the current market value. The average price of houses sold in this area was 102.5$/squarefeet where as my offer was 98.2$/square feet.
Today I will let the seller know that I will buy the house if they fix it or reduce by 5k or I will walk off.
The only reason why I'm still interested is my wife loves the house and she is emotionally attached to the house. She already finalised the furnitues, blinds, appliances etc etc. I dont want her dreams go away for this problem.
Thanks again for the replies..

[nss_be]

I forgot to mention that its a foreclosure property owned by a bank and listed by a listing agent.
Now what happened is the seller(listing agent) did a pest inspection and found out that the house is infested with wood boring beetles. So I'm expecting a reply back from him soon.
Can anyone please help me with the following questions.
1. Why did the seller did a pest inspection?
2. Why did he disclose the inspection report to us?
3. Should the seller disclose the inspection report to other buyers?(Its a foreclosure property and the house is as is)