If so, you will typically receive some level of "legal work" as part of the process.

I don't know your local laws, but here in NJ increasing units is very difficult legally.

However, we were informed today that our closing has to be pushed off to a far-off future date (rate will no longer be locked and basically will have to do the financing process again) due to an issue we haven't run into before, but seems simply not legal to us, so we hope we can get some assistance.We only know as much as we have been told, so here we go... the home we are under contract for was sold to the current owners via an owner carry, so the note is held by a private individual (the owner before the current owners).

@Csilla Veress A couple of books that may help with understanding PV (present value) calculations, as well as note investing in general, are:Invest in Debt by Jimmy NapierPaper Profits by @Joshua Andrews  (my personal favorite)This blog post by @Mike Hartzog may also be helpful:https://www.biggerpockets.com/blogs/5359/41924-doi...PV is the way most note investors do pricing for performing notes, but for non-performing, you'll want to build an ROI calculator as  @Chris Seveney suggested so you can look at various exit scenarios and take into account costs like servicing, legal fees, insurance, etc. 

I want and will be in compliance to the fullest extent of the law, but to be truthfully honest, I dont want to go any further for this particular renter than what I am legally supposed to do and I want to be ready if the late night plumbing call comes and I am on vacation.

Your situation depends on your involvement, your entity selection, and lots of other factors that preclude an informed opinion.3) You didn't ask, but I offer that you should not take or act on any legal, regulatory, or financial advice on a free forum and always seek a professional opinion or two.  

If you win the final bid, the legal firm handling the sale will start bugging you to close asap.

Question - Do I legally have to allow this pet? 

At the very least your insurance company could help with legal council if an issue were to arise.

Wholesaling scares the heck out of me; is that a legal process that a licensed agent can engage in?