Hi there,
I’d say the only thing holding up the house, is the paint.
Especially if the agent has had advise that the house is unsafe to enter for inspections.
Depending on the areas value.
Bowl it over and start again.
The termite colony should have been eliminated. However, I’d look at using steel or termite safe timber frames for the new home. Todays chemicals are a far cry from those used in the past, maybe if the house is to be built on slab, treat the site area and install a non chemical external barrier like termi mesh. The plumbing points can have collars placed on them to prevent access.
Good luck,
David