Nor mine. I agree with you wholeheartedly on the order of events as you described. What I tried to lay out for the other poster is what I think was the best strategy (still might be) for the homeowners. At this point, I'd expect they'll need to crawl to him on their knees to get his asking price down, but it could still happen.
Bottom line: government isn't the solution to this. If the homeowners were to leverage their purchasing power they likely stand to do a bit better than $30,000 apiece.