Sounds like the lady may have a few screws loose -- but hey crazy people's money is as good as the next person's money.

I think she has more than a few screws loose.... and I wonder where you'd meet on a $130K offer on a $200K list? ;-)

It would be kind of funny to counter her offer with something like $225K, but I'm sure the realtor is not interested in playing those games.

We had one crazy looker too. First she said the house was too dark. Next thing you know, she was back with a builder, trying to figure out how to make it into her dream home. Then there was the fence. A quote for surrounding the entire property with a fence. Than she went bye-bye. And we all breathed a sigh of relief!

You are fortunate that your market is still hot. I would check and see if thats really the case. Beverly Hills is now experiencing a 14% drop and Newport Beach is dropping further. Those areas usually don't see that. I don't know where Zone 6 is but if I were you I would go to other open houses and see if anyone is there looking at any homes. You get the most action at the beginning of a listing so it would be good to know accurately what the market is doing.
Before you tie your home up with any buyer, you need to know more about them. a letter from their lender doesn't guarantee anything. If you should ever get a buyer walking through while you are there, you can ask--do you live nearby now? or some friendly question.
I wouldn't worry about odd buyers. They have to live somewhere. Sellers sometimes are a little hostile to prospective buyers, especially ones who have plans to change anything. thats why realtors sometimes want the sellers gone during showings. Clearly the realtor wasn't crazy about this buyer but you never know.,

Marge727, we're for sure in a hot market (oil & gas + more) and it's easy to get an accurate picture of the market because it's small. Open houses aren't done here (very, very rare).

If my agent were up to it, I'd love a crazy persons money. She can offer me 130k and I'll counter with 270k and we can meet in the middle at 200k ;-)

I dealt with a "crazy lady" on my first house sale.
She started with a low ball offer the first week the house had been on the market. I did not counter, or rather countered with the asking price. (It was a strong market and while I was confident on the pricing.)
She came back a few weeks later with an offer I could work with and we agreed on a price.
She found tons of crazy "inspection" items and few legit ones. I offered to repair the legit ones and denied the crazy ones. (i.e. "needs new AC" the AC was 6 years old.)
She backed out. I got her earnest money.
She came back a week later, with the price we had agreed upon. I had fixed the legit items (things like the shower diverter was a bit stiff and we needed a GFI in the kitchen.)
She missed the first closing date because of funding.
In the end, it all came through.
I was fortunate. She did not know it, but the house was paid off and I had low carrying costs and the market was good.
Was she crazy like a fox? Her behavior definitely could have worked to her favor in another circumstance, but I really thought she was nuts based on my conversations with her.