You'll want your PL named as lender on the property insurance policy.

Expensive markets can be a challenge, but here are deals to be had, depending on the amount of work you are willing to do.

Can someone please let me know the mechanics of the recording process on an owner-financed deal?

He has no idea what is going on here and should refrain from spreading inaccurate information. 

If you aren't sure who to choose from, ask each of them for a meeting/consultation to break down your goals, the market, and the acquisition process.Once you've selected one, have them draft the offer for you and take it from there.The best agents are responsive, knowledgeable on the local market, have a strong supporting team (i.e. lenders, title, inspectors, title, etc.), and know how to put together a deal.As @Michael K Gallagher mentioned, you'd want to clarify whether or not your agent is also representing the seller.

Any advice on the steps to do this is appreciated.

I grew up with a realtor for a mother, but she’s not too well informed on new construction.

I confirmed that his parents had no debt on the property. 

Welcome and congrats on taking some action.

Lowers your downpayment and your costs based on loan amount.