I have never purchased a home before so I am wondering if the conventional mortgage preapproval process is similar to an IRS audit. 

Have you seen cases similar to this where the seller did get audited?

Audit, Tax, Private accounting.

My accountant has saved me hundreds of thousands of dollars over the past 25 years and has been able to keep me out of any audits and grief that the IRS can give you unless you keep your records tight  and follow the rules.

Currently I work as a CPA doing audit and attest work. 

If the Sellers Agent ends up working with both the Buyer and Seller then they are now performing as a Dual Agent and will need to disclose to both parties and would need to be impartial throughout the negotiation.

You can get a desktop study done using modeling for around $2,000 usually, but it likely won't hold up under audit and won't get as much benefit as a forensic study. 

@Maria HintonMost of those "guru" speaking programs are focused on parting you from your capital ... whether you learn anything of material and become successful in investing is somewhat secondary.If you want to learn about real estate in a classroom-type setting, I would suggest auditing a course on real estate at a local university or community college.  

They view them as a taking of profit and it could jeopardize your exchange if audited.  

If I convert it back to a sole owner pass-through LLC will it spark an audit?