This is part of the roof.This the bulk of the damage. 

This way the property reverts back to me if there is a problem with payments and any monies lost by the buyer is considered rents (liquidated damages), which is stated in my contract.

It shows evidence of past termite damage with no professional treatment.

Whats the damage?

Just deduct it out of the payments.But I have to believe the lender will snap to when the seller's attorney sends them a letter stating they will be sued for damages if they fail to provide the payoff letter and the sale falls through.If the request for a payoff letter was put in writing, I believe the lender has a set number of days to provide it or else they can be in violation of the law.

Termite damage is not usually covered by insurance. 

KW is a reputable company but it may not be what you need.

Section 8 tenants also have a not completely unfounded reputation for destroying units.

The house needs a basic restore including:Popcorn ceiling removalNew flooring (tile downstairs, carpet upstairs)Paint and wall repairNew ground and crown mouldingPlease point me in the direction of a reputable GC here in the DFW area.

The reputable QI would open a separate interest bearing money market account at a bank with the funds being held in escrow; you would get statements showing the funds and the account number.