It's been discovered that the current tenant fabricated his lease to meet certain requirements with the fuel supplier as the lease we have is drastically different than the one his attorney sent us.At this point we can pursue this legally but the deal is compromised as the buyer is already asking for a reduction in price and who knows how long it will take and how much it will cost to get the tenant out.

This is something I tell my own clients now as a Realtor - you probably aren't going to get a killer price AND owner financing... killer prices are for cash, owner financing means some compromise and some compensation for a seller's risk.

Or do i go with ACME pest service that is likely going to save a few hundreds dollars and may or may not offer a warranty.I'm obviously going to repair all visible termite damage as well as anything compromising structural integrity - but i want to minimize the financial penalty when sell of disclosing the house has been treated for termites. 

The FBI calls it the Business Email Compromise scam and it causes big losses.  

Past that it is bad-faith dealing to be backing out of contracts unless there is an undisclosed defect with the property or title that compromises the sale, which is an opportunity to come back together and renegotiate or exit the contract.Aside from that, the idea of "calling the sellers bluff" . . . .

You and @Alex Grosvenor definitely helped me see that this is a risky situation and could compromise the investment.

We are moving forward with seizing assets and garnishing wages.I highly encourage other landlords who are able to go all in and not compromise. 

Wordpress sites are extremely easy to compromise if you don’t install security tools and keep your site auto-updating.

If the cloud storage gets compromised, I have a backup at home. 

You can offer the same amount and come out of pocket, offer a compromise somewhere in the middle, or offer the appraised value if you don’t care if you get the deal.