@John Leavelle,Your look at this exercise from a wrong perspective :-)Forget the list price.

He said it was fine and asked for me to put in a the contract that he will also be marketing the property and if he finds a buyer, we will give me the opportunity to exercise my option to buy and if I don't, move forward with his own buyer.So it looks like it is all working out.

This way I can exercise my option and back out of the deal without losing my earnest money.

Part of this exercise will be developing your strategy.  

@Scheryl McDavid  If you are really serious about buying a place and not just doing an exercise, you need way more information.

Currently I am looking for a good real estate focussed financial advisor to get started with.When I am not working I am usually cycling or other exercise, enjoying home theater, spending time with my girl.  

I have never tried to exercise that clause so I'm not certain it would hold up but I figure it's worth putting in there anyways.

I saw similar posts but none were specific about the procedure of exercising your option to exit the contract. 

Do not worry about the DOS (due on sales clause), no lender is going to exercise that right.

If your concern is some bank exercising the due on sale clause, then yes it matters....no mortgage, no due on sale clause.