The $10 per point deduction from the price I mentioned above is not a number I just pulled out of the air. That's what you would pay to rent those points that they've now taken out of the contract, and it's a reasonable compensation. I know that significantly reduces their selling price, but that's their bad, not yours.
Also, you'd better be sure their vacation with those points is already completed. If it's not, you won't be able to close until after their vacation.
I went with 1/2 your proposed price simply because I had already sent in a low offer that we had bargained up by about $500. Thanks for that heads up, I will send off an email now to the agent about making sure that the vacation is finished up.