Was this are2 of damage (damage2Bottom.jpg) a split and stitched back together? I couldn't tell

Anyway, the rug is in fact hand knotted. The hole you showed i believe was about the size of a dime, no? If so, I wouldn't be concerned. Stains I would be concerned about, and dry rot too. You should be able to tell if this is present.

Please detail on the damage from folding. Does the rug feel stiffer in that area?

Did you get it online or locally?

The cut really should be repaired. I cannot see whether or not it is from the photographs, as many repair techniques to fix something such as this use a very thin gauge thread

I think you did fine on this rug if you decide to keep it. You may notice something here or there like minor color run perhaps or other minor imperfections. but when you get down to it, there's not too much out there to beat a price like this for an wool carpet even in machine made synthetic rugs.

As for the fringe, it's really white. I do not have the rug in front of me, but if it feels as though it's not as sturdy as other rugs you've seen, it could be that it's a different grade, it could have been bleached, or that there's a lot of material (e.g. it's thick) with not much "human intervention." What I mean by this is many coarser rugs use thicker material with less refining. Generally speaking durable fringe comes from both refining and technique. the more strands of yarn to comprise one strand, the stronger they will all work together. However, the twist or spin which is placed on each warp will also affect the durability.

If you're very concerned about the fringe, you could always use the tape method to hide it away. Otherwise, if it's loosely spun, you can try to wet one at a time and give it a harder spin to twist the fibers together. Try it out first. Remember to have clean fingers, before doing so otherwise the fringe may be colored.

Here's how to tape it up

http://www.rugrag.com/po...or-Eliminate-Fringe.aspx

Here's deteriorated fringe from bleaching

http://www.rugrag.com/post/Can-I-Whiten-my-Rugs-Fringe-Losing-Fringe!.aspx

It happens a lot that I don't say this when talking about a rugs on these threads, and meant to say it before

It really does look brilliant in the room.

As for fixing, it shouldn't cost too much for an inexpensive but sturdy repair. Was it advertised with the having the cut and small hole?

I think it is from Iran. Not exactly sure where. The type of knot I would need to see the face of the pile breached, but it doesn't matter if it's Turkish or Persian knot: it's an Iranian Rug I'm pretty sure.

Yes, definitely Iranian (pre-1935 Iranian rugs are referred to as Persian). Your rug was made in the last 30 years or so, and it looks to have been teawashed - note the color difference from front to back. I think it greatly improves the look of your rug, and the price was fair for that size. I wouldn't put too much into repair, just keep your eye on these areas and do what you can to protect them.
Your new rug really does complete that room. Enjoy!

NK