We reached an agreeable price. I think they're getting a steal, but we can live with this.
They figured out about our mutual friend. Said mutual friend reassured me that it's perfectly ok for them to buy our house.
So, pending an inspection we should be closing in mid September.
Keep your fingers crossed!
I'm really looking forward to the new house. It is MUCH bigger and the neighborhood is quieter and full of kids. But as I look at the picture on my blog, I will miss this house. It's a beauty. Our new house isn't nearly as nice on the outside -- it's not a Victorian. It doesn't have those funky details. But it is a nice house and when we fix it up it will be even better. But I do feel a little bittersweet about letting this one go.