plumbing

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I just purchased a HUD home and the metal pipe that leads from the water meter into the house is rotted. They cannot turn my water on due to the fact that there will likely be a geyser in the the front yard. I got an estimate of $2000.00. UGH. He said that more than likely the entire house needs to be redone. Does this sound right and do I have to redo the entire house? Any suggestions would be most appreciated.