Having the common public running around trying to cure clouds on title is an exercise in futility, since they don't deal with this stuff everyday.

Hopefully if the deal goes south, the borrower makes good without the lender, whoever he is, having to exercise his rights under the personal guarantee and go after other assets.

Even if the option gets recorded and somehow the lender becomes aware of it, they are unlikely to exercise the due on sale clause as long as you keep current on the payments.

The buyer will have an inspection period, either now or after lender approval which they might exercise.

Not sure how you plan on purchasing this property but for the sake of this exercise Ill assume you are going the standard route with 20% down.

The lesson learned ... 1 - It's good to know your lease clauses inside and out and not need to exercise your authority.2 - Use spouse as a "higher authority" figure to buffer conflicts with women tenants.3 - Draw on the collective wisdom of my BP family to vet responses to difficult situations.

Can the tenant-buyer upon exercise of his option ask the bank for a loan remodification since he is the principal homeowne now?

The exercise will verse you so you can rebut any ney sayer later.Understand the inability to finance can be doing you a favor.

If Bruce Norris is correct and the prices will go up 20%/year in next 2 years (I assumed that the property is in Riverside), then you may be lucky and make some good money.Maybe a lease option would be better, if the price goes up you exercise the option, if it goes down you lose the deposit?

A few years from now you will try to exercise this option.