The flat fee buyer agency fee reduces the amount of the buyer credit/refund, generally by $6,000 (although options range from $999 to $8999, depending on how much help the buyer wants from the agent).

That's pretty fair.

Our website was just OK, our email campaigns were hit and miss, our conference presence was fairly minimal. 

To me that is requires major compliments, and the review I posted is not appropriate.They really are going above and beyond in this circumstance and its not fair to them to keep this post online just because I wasn't able to reach them and discuss this over the weekend right after new years.PLEASE reconsider taking the post down.

The problem is that your debt payments are going to basically wipe out that $400K profit unless there is room to increase revenue or reduce expenses.

At the same time, someone else reduces your debt, and you get to use the tax code to improve your tax situation legally.  

Just be mindful of the following things when it comes to California.California does not recognize Bonus DepreciationCalifornia does not recognize real estate professional status.Therefore, you can potentially reduce your Federal taxes but not your California taxes.

My agent is saying that we are unable to split the contract that way (or reduce the purchase price), so I'm trying to figure out options.

From a tax standpoint, there are additional disclosures to make when selling a business asset for less than fair market value to a related third party. 

For house flipping, consider an LLC taxed as an S-Corp to reduce self-employment taxes by taking a reasonable salary and the rest as distributions.