Did you do a walk thru right before you closed? Was the a/c there?
Pre-approval is necessary with a short sale offer. The majority of the banks will not look at a sales contract for their approval without a pre-approval attached to the contract. You can however, delay your financing contingency deadline until after you receive the banks written approval if you put it in your contract. Be prepared to be patient.
I would focus on selling it. If kept as a rental, who will be responsible for repairs, taxes etc. Is there enough money in the estate?
Will the kitchen be open to the other rooms? If so, what flooring are you using in the adjourning rooms? A nice flow will definitely add value. Hardwood floors do seem to be in the preferred choice nowadays.
There are some private owners who may consider doing a lease purchase with you. If you contacted a real estate agent, they could call around to the listings in the area that you are looking for and ask if they would consider doing a lease purchase. Are you positive that you can't qualify now with you husband being the only one on the loan? I would speak to a mortgage broker first, they should be able to help guide you as to when you may be able to get approved and can also help with credit repair companies.
The cash buyers "not contingent on financing" are out in full force. Find an agent to notify you when the deals come up. Know that the "good deals" will most likely have multiple offers and should be bid on quickly. If there is an owner occupant only time frame and you are an investors, have your offer ready to go when the bidding opens up to investors.
There are programs and grants out for down payment assistant which combined with asking the seller to pay for closing costs and prepaids, might just get you to closing on a condo with nothing down. The condo association would have to be FHA and program approved though.
Ask the listing agent of the condo that you are looking at if it is FHA approved and then double check. Some agents don't do the research ahead of time.
There does seem to traditionally be a slow down in real estate after the spring and summer markets. However, interest rates are low and the buyers are out there now.
There are 2 things that could make it a slight more of a challenge to resell. Busier street and corner lot. However, if you get it at a good price, it should be all relative when you come to sell it. Would it make a good rental, if you didn't get it sold for the price that you would like in the future? Remember that it only takes 1 buyer for a house. Not everyone has to love the location.