For the proceeds I have to pay seller I would have to issue him a 1099 right?

If you sell directly to a homeowner, the issue can come back on you and bite you in the a...  

@Clark Harbaugh, Given the favorable tax rulings over the last few years (in particular revolving around trusts and their equaling a beneficial interest in the underlining propery) the IRS has actually been much more lenient (or at least silent) on these issues. 

There's a very good chance the issue(s) you face have already been discussed and answered.Ask questions in the appropriate forum.

The problems you mention are just known issues.

Tenants have dog allergies and chronic asthma; the persistent smell and the dog hair found in multiple areas so far are harmful to our health and have, can, and will exacerbate health conditions of tenants.We believe the issues described above present a materially dangerous or hazardous condition to the health and safety of our household.

We have had a pipe burst during the cold winter months, the roof needed to be replaced (thankfully covered by our insurance), and some issues with electrical, which hasn't been majorly updated since it was built in 1973. 

FYI Dominic, the resident had been in the property since early 2019 and ran into issues in 2024. 

Quote from @Aj Green: Quote from @Gregory Wilson: The real issue is how much of a deposit do you have to try to get back from them.Sure, your contingency might work but I assume you gave the deposit to the seller.

There's a good chance the issue(s) you face has already been discussed and answered.Ask questions in the appropriate forum.