If the term runs out, and you don't exercise the Option, then you lose the right to buy...and the terms in the Option Agreement have been satisfied. 

In regards to lease options, there are things that you need to be careful about so that IRS doesn't view the transaction as immediate sales, but otherwise the seller gets to keep the title until the option is exercised. 

nope...One last thing, working with first-time investors is an exercise in futility.  

Plus it sounds like you have your ducks in a row and unlike some many other splits, besides an up tick in costs that you currently split, yours should work out quite favorably.Finally, I would do the book exercise that @Daniel Donadio Jr and look at the relationship through the framework that @Ola Dantis laid out.

Real estate investing is all about generating deal flow and that's not an "easy" button exercise.

If it does work to justify paying the points then it becomes an exercise in trying to pick the best option.Good luck

It depends on what you mean by seller financing.If I am the owner and I am agreeing to a lease with an option, there would be no change of ownership until the person exercises the option and completes what the option requires.

The tenant/buyer would put down a non refundable deposit of about 20K and then rent the condo for 16 months and then have the option to exercise the purchase of the property or forfeit the 20K deposit. 

They will exercise their option simultaneously as my end buyer is buying the house outright ( essentially, they are selling their option at that time).

I thought this was the end of my race, but I was able to make a speedy recovery thanks to sauna and mobility exercises from Kelly Starrett.