Doesn't it seem like jumping the gun asking for design advice for a property you don't even own, and may not even purchase? Additionally there are obvious discrepancies between the aerial photo and the topo plan you included which seems to show a 5foot cross slope at the garage doors/driveway, yet the driveway layout would seem to indicate the grading is actually level across this end of the house. Creating a more level area immediately adjacent the back side of the house may not even be the most logical/cost effective location,nor have you given any idea of what you'd be willing to spend to transform this supposed liability. If you're seriously interested in bidding on this property, I'd suggest it makes more sense to revisit the property with a local landscape contractor who could advise you on cost effective viable solutions as well as give you an idea of costs. Getting what ifs on redesigning this site with the limited info given is not going to give you anything useful in my opinion. At the very least you should add additional photos at ground level showing the real existing grades and conditions, and a better idea the minimum dimensions of the flat area you want to fit into that backyard.

Halo Alitabeth, I agree with Doug. Use the sleepers and make a raised bed area which you can green up to make the space softer on the eye and attract birds. The most important thing is always to remember to build the soil up with good compost, and after you planted, finish up with a thick layer of mulch to protect plant roots and make the area look complete and rounded off.

So the sanding would not even be necessary if the deck had not gotten too far gone. When I had a deck that needed the occasional repainting, it was about a 2-hour job from beginning to end, mostly with a roller and a little brushing at edges. When I bought the deck, it had been let go by prior owner so I had to pressure wash and do a little sanding (with a handheld sander). But never had to sand again when painting. Just wash. And your deck looks very nice.

Slope frequently does not convey accurately through photographs. It's hard for us to tell exactly how much you're dealing with. To me, it looks like you're going to need some retaining walls and cannot convert it back to slope. Keep in mind that slopes are like slow moving glaciers. A slope could stay in place for awhile. But over time they move, working their way downhill. After a bit, if just slope, I would imagine you'd be constantly cleaning soil off of the patio. There would likely be erosion problems coming, too. To replace what is there, I would recommend you use a concrete or masonry material due to its being longer lasting and its potential to be simpler. The existing wood walls look very busy and poorly constructed. I would recommend that you get someone on site to design something simpler, within your budget. It would be nice to make the slope toward the patio, including the stairs, less steep. I would use plants that didn't get too tall flanking the patio. Right now there are large bushes at each front corner of the patio. To me, they encroach too much in the view and would be better placed closer to the house, but not in front of windows. Directly out in the yard are a couple or three trees that will eventually be smack in front of the main view. I'd consider doing away with these in favor of trees pushed more to the side of the view.