Quoting: Keshire

The children are part of the main houses. Even taking them out of the town won't allow you to buy the houses. You need to disable the undamageable and unkillable flags on them.

Ok, so it is impossible to own all of Bowerstone South. Thanks everyone for the input! On another note, I had forgotten about Knothole Glade's chieftain's house. Now, way back in the original Fable's days, IIRC, I believe that I killed the chieftain before I did the white Balverine quest. I cannot recall if his house came up for sell. I may have to go and try that. Thanks again!