If they want to put limits on future contacts that is different than passing a law that changes a contract between 2 consenting, competent parties that was legal when entered into.When rent control is first passed and applied to existing leases, the government is changing the contract.  

I'm sure you've seen some of these news reports with underpinning where they dug too much at one time and the wall collapsed and damaged a party wall damaging two houses. 

In my experience people that act like this generally are doing something shady with regards to how they are framing or selling the deal to the seller themselves and are trying to keep all parties in their separate silos. 

Bottomline is having a good talk with all parties openly discussing how to handle this in a way all parties can be happy and lessen surprises.Hope it turns into a wonderful opportunity to get better acquainted with your in-laws. 

First mortgage paid off as well as all other parties (attorneys and surplus, etc).

Best part I live on the beach in FL. 

I recommend a thorough risk management survey, preferably by a third-party professional that is trained to spot problems. 

He advised me to consider the offer at $222k, cautioning that we might have to resort to a price reduction if no other parties express interest.

Yes, I understand that part. I

Yes you'd have the 2.5% fee (not interest, though, just a one time fee) but you wouldn't have to go through third parties, buying gold and such.