When you think of your kids and what you could leave behind, $1.3m that will continue to appreciate is a helluva lot of money.This exercise has prompted us to find a way to combine both goals.

This was an exercise for me to see where I can improve my approach.

The clause is rarely enforced, but it does happen so you need to be prepared to resolve it if the lender chooses to exercise their right to accelerate the loan.Simply put, whom ever holds the beneficial interest in the property, typically the owner, has the liability.

The buyer had no problem with an assignment fee of 3.5%-5% as long as it also counted toward their downpayment (if and when they exercised their option).  

This is setting yourself up for failure right from the opening.Once you have a tool like this, figuring out your biggest expenses, or what class of item you spend the most money on, it'll be easier for you to understand where you can go leaner.You don't want to spend time accounting for every single dollar, that's not an effective exercise.  

If they DO let me exercise the 5 year option, how does that work?

My experience is that becoming an agent is an exercise in money going out the door for a good bit.  

Once you go through the pro-forma exercise a few times in excel it gets pretty easy. 

However in scenario two.. one needs to exercise normal home buying protocol.. just like you were buying a home in LA to live in.. you would and or your agent would request the normal inspections for you.

If they choose not to exercise that right then they won't win damages later on for what they could have found but chose not to investigate.Now had they completed an inspection but the defect was not discoverable in such an inspection then they might win the argument.