Newsflash: Scheduled to close very soon to buy a house and the land survey came back showing that our soon-to-be neighbor is encroaching on what would be my property. How should I proceed?

I live in Illinois and am about to buy a house. Tentative close date is next week but the survey of the property recently came back and shows that the neighbor’s driveway significantly extends onto what would be my property. Additionally the neighbor’s shed is also mostly on my property. It’s unclear how long it’s been this way or if the sellers knew, but it was not disclosed to me. It does not appear that there is any type of easement or any document acknowledging this encroachment. My thoughts are that the driveway is curved and not huge to begin with and if I demand that the driveway get pushed back it may make it very difficult or even impossible for the neighbor to get in and out of their garage. I also don’t want to start off my time living in this neighborhood with a bad relationship with the neighbors by demanding driveway work. I really can’t see much of a benefit to me by taking that land back as that area of land is at a bit of a higher elevation than the rest of my property. I also don’t know how long it’s been like this or how eminent domain law applies. I spoke to my real estate attorney and he mentioned a couple possible options:Easement. It sounds like I’m allowing my neighbor to use my land but it would be something formal in writing that it’s my land. Sounds like maybe we could add some sort of stipulation that the neighbor will maintain the land and I hold no liability if for example someone slips on their driveway. It feels strange to give use of my land for free while still paying the property tax on it though.Title Insurance Coverage: Maybe the title company will insure us if the neighbor ever makes a claim that it’s their land or declare eminent domain? My attorney did not have high hopes that a title insurance company would provide additional coverage for this type of encroachment but is going to look into it.Compensation: Seller takes some money off of the purchase price of the house for not disclosing this information and possible headache that might come with selling the place in the future with this disclosure. Hard to come up with a number for this.Selling the land in question: I actually proposed this to my attorney. I thought maybe I could sell off the land that they have already built on and have new property lines could be drawn to reduce my property tax. My attorney said that this would likely take a lot of time and money to do and likely would not be worth it. He also thought it would be hard to decide on a fair value for this land.Walk away: While I like the house and location, I do have the option to cancel the deal outright with this new information and spare myself of any potential headaches.Some of these above things may take a while to iron out and might delay closing so I’m just trying to weigh my options and figure out what to do. Would love to hear if reddit had any other thoughts or advice on the matter.