Between the laws, customers, their relatives, lots of employees, dietary, security, etc it’s not a business I would want to get into.  

However, in the game of investor relations, and in any game that is based upon actual human trust and relationships, progress is not linear.

If the attorney is offering to issue a title policy post purchase ask for a pro forma commitment before bidding so you can see what exceptions to title will be taken so you'll have some idea of what defects in title will not be covered by the policy.

But I would sure cover your butt by putting it in the lease very clearly that that space is NOT to be used as sleeping quarters due to lack of egress.

Since the seller may not have enough equity to cover traditional commissions, what are some alternative arrangements or strategies that can ensure fair compensation for the realtor involved?

Just be sure to document why you disqualified to CYA (cover your *ss). 

Unable to find coverage.

Our approach so far has been relatively aggressive.

I wonder if there’s anyway for a seller to have a buyer pay for PMI to cover the balance?

The other structure would likely need to be 10 feet from the existing structure.In my experience finding fire sprinkler companies for relatively small job is difficult and very expensive.