You were essentially not in business unless you were a true cash buyer though.  

There are several approaches to doing lease options, and consequently, many variables... so it would be prudent to do so to 'maximize' the exposure, pre- screen the largest number of applicants, increase the likelihood of 'closure' (selling the property) with the tenant buyer(s) and structuring the deal, to optimize your ROI.

Regarding numbers, since end buyer will pay off the mortgage that owner owes $40K plus what he’s asking $48k, where ARV is about $53 only. 

Most areas are slowing down because of lack of inventory, not lack of buyers; if this is the case in your market, you may be able to get buyers before your flips are completed, by using "coming soon.

I guess I wanted to get an understanding of how a conversation goes between an agent and buyer.

. :)I used to list, negotiate and represent buyers of short sales back in the hey day of the market crash. 

Should I wait to have these items done before signing the contract (could take weeks) to give time for home inspector to inspect the property (and risk another buyer over bidding me), or just sign the contract and have the home inspector come when everything is done?  

Buyers often have trouble picturing what it will look like with furniture. 

The risk of waiting is that some other buyer can swoop in at anytime even in a slow market and get that property in contract for a price that you would've been willing to pay.

At the moment I just have the pre-approval from a bank, so I can search for properties and realtors know I am a serious buyer.