They file the lawsuit.

Now we all have to file the self employment 1098 tax.

I was also involved in the development of a small (20K SF) self storage facility where I own a minority stake.

You know the work involved is much higher managing C properties.So as with many things, why not diversify into an A property, have your tenants pay your mortgage and your place to live, and set aside that money saved for yet even more deals?

These options usually have very little fees compared to getting a loan against the property and needing a title company and/or a real estate attorney involved. 

@Basit Siddiqi we have not filed for the year yet.

If you want to prevent them from selling to someone else, you could file a lawsuit in the county where the property is located and immediately record a notice of pending litigation (lis pendens) with the county clerk.

It sounds like the errors were caught before filing, which is good.

It isn't bad or good, it all depends on a persons goals and level of involvement, or lack of involvement, that they want. 

Unless you have an arrangement with the buyer for a flat fee or  assignment I am not sure how you can run your negotiations with the seller with your end buyer present.I recommend involving the buyer once you have the property under contract or there is nothing to stop them cutting you out of the deal.