This area is crawling with undead. Start off by running to the left. Be careful not to fall to the water since the area is poorly lit. Take note of the gunpowder bombers. They won't do damage on their own but once you're hit by a fire arrow, you'll die instantly. If you get hit by gunpowder, make sure to wash it off by rolling in the water. Once you've reached the house, eliminate the undead on the first floor and head to the second floor. You'll find a chest there containing a Titanite Shard and a corpse in the balcony that has a Soul of a Proud Knight.
Continue to the walkway and beware of the heavy swordsman that will come at you. Defeat it and destroy the archer. Next, go down to the shallow water and loot the Large Soul of a Lost Undead and a Lifegem from the submerged corpse.
Carefully walk towards the destroyed houses to aggro the enemies and take care of them one by one. Enter the first house to the left to find Dark Pine Resin x3 from the corspe inside. Be careful when walking towards the stone house since there's a lurking beast there that can cause Bleeding damage. This enemy is afraid of the light so lighting up your torch when fighting these things will help a lot.
Head inside the house where the beast is lurking to find a corpse that has x10 Iron Arrow. Next, climb the stairs and turn to the first right. Get rid of the enemies here including an undead hound. There is a couple of archers on the top of the building. Don't get inside the building yet since there are a lot of undead skirmishers to deal with. Pick them off one by one. Once clear, head inside the building and open the chest behind the counter to get a Bandit Axe and Brigand armor set (Brigand Hood, Armor, Gauntlets and Trousers)
Carefully go upstairs and take out the archers and another berserker. Loot the Titanite Shard and Repair Powder from the chest. Leave the building and operate the Pharros Contraption in front of it. This will light up a large chandelier that will illuminate the area. From there, move forward a bit and hop to the roof of the house earlier to find a corpse containing a Large Soul of a Proud Knight and x3 Small Smooth and Silky Stone.
Return to the stairs and continue to higher ground. Defeat the two enemies here and continue along the path. There's an undead hound and skirmisher inside the house to the left. After dealing with them, follow the path and take the next stairs again.
Lonesome Gavlan
Along the path you'll find another large building with several of those pesky mutated primate beasts. The Pharros Contraption you activated earlier will keep them at bay and will allow you to safely snipe them from a distance. Don't forget to loot the Emit Force and Large Soul of a Lost Undead from the corpse hanging by the edge of the cliff.
Take out the beasts and open the next room of the building. Quickly fall back since there are three more of those beasts inside and they can destroy the whole wall itself. After dealing with those three, enter the house again and you'll find another beast on the second floor. Take it out and open the next door. Here you'll find two chests. One of them is trapped so quickly leave the room to avoid getting killed. Loot the Greatsword from the safe chest and x2 Silver Talismans from the rigged chest.
The NPC here is named Gavlan and is the only NPC in the game that purchases items from you. Another thing to note is that he will move from this position after talking to him so make sure you have all your unnecessary equipment with you before talking to him. He also sells various poison and anti-poison items.