I don't have a forwarding address or security deposit at all.

People rarely pass up free help and you proactively addressed his number 1 concern  which is if you don't work out, your are effectively "pre-fired".  

short cycling will prematurely fail the HVAC, so you have to address it. 

I know the average water usage and should it spike I will address the issue.

Also, you really should have some cash in reserves to address any bigger ticket maintenance items that may occur after you have a renter in place. 

I had another tenant who was not quite following the lease on something, so I really wanted to address that with her.  

Not the problem it is cracked up to be, but it needs to be addressed in the buy.I handle park homes by getting a 10% down payment and creating a note.

I'm totally open to paying their full 3-6% commission (assuming the numbers work)... but I was curious if any of you get pushback from agent worried about sending you an address to look at first, so you don't try and cut them out...I of course would never cut them out, its bad business in my opinion, but I'm curious the right way to setup a deal?

I'm trying to decide how I should address this with the seller (if at all) and if in fact the encroachment could create issues for me down the road.

If the inspector finds things that you aren't going to be addressed or don't want to deal with then you are allowed to bow out of the contract (if done within the deadline times).