You can legally change or cancel a contract if all parties agree. 

In any contract you don't typically need a clause saying what you CAN do, its assumed you can do anything legally allowed as an owner including sell.

They have addressed the issue of depreciation of components, but not the actual methodology of the study.

i fyour getting paid off when the vertical loan goes on.. then your in first position . so not sure what the issue is? 

In Illinois, when an agent does that, there are functions normally expected of the realtor that they are legally prohibited from doing.

Ultimately would you say our case is more so with the inspector for not letting us know about the exposed wire and not so much with the agent and the cosmetic issues?  

I know this is also a National issue, especially in land constricted markets.

If they know you, have spoken to you many times, and you have always been friendly with them, just explain your points, that there is no legal reason to deny your plans, and ask them what you can do to help get it approved.

If you know of any legal entity in TX that can help in a case where GP is not doing their job (maybe a branch of SEC), please let me know.TIA

After renovating, I updated the interiors, addressed exterior issues, and enhanced the overall appeal.