You sign a contract with the seller to protect your interests.

do not give him any money whatsoever.the most you should have to do is sign a buyer agency agreement - which is an agreement between you (the buyer) and the broker...most brokers have sales agents who get listings/clients...clients are considered sellers or buyers that sign exclusive agreements with a brokerage.

I sent him the contract and he did not sign and return it.

Meanwhile, I have a box of bandit signs sitting in my office that I can no longer post (disclosure!)

You can have the previous owners just sign a deed to you and then they have no redemption, but the only problem with this is that many of these properties have major title issues.

Once I sign the lease option agreement with the seller and find a tenant to put in the home then have the tenant to sign their lease agreement from me, wouldn't I too have to come out of pocket to put down the option fee at the time the lease option agreement is signed between me and the original seller?

If you are charging for "...ANY action beyond that initial tenant phone call..." then you aren't managing the property the way I or any investor would want... or the way the property management contracts I've signed specifically say are "agent responsibilities".

I haven't purchased yet, but am signing up for the free trial.

The seller did a termite treatment and we didn't see any visible signs of damage when we initially looked at the house and everyone said termites are very common.

I signed up for one of the Wealthability online classes.