Rent-to-own experiences / tips?

What interests me is, if the owner can no longer pay the nursing home costs, to what extent the children are still allowed to decide to whom the house is sold or how the contracts have to be designed so that you really get the house and the social welfare office does not have a say in the sale. In this whole construct, it is unclear to me why the children/the owner do not simply sell immediately or whether the children are already allowed to "sell" a house that does not/yet does not belong to them?

So it is not because of money/assets, I believe. The heir (about 60 years old) lives in a house in the south and still has a property in Munich. I think it is mainly about the option to possibly move back here again.

I did something similar, three sizes smaller, as a seller. If it is notarized correctly, it is not a problem. The notarial contract stipulates (for me it was about a piece of land)
- that the interested party leases the land for an annual rent of X €;
- that I waive a right of termination for ten years;
- that the interested party can buy the land after ten years at the price of Y € (purchase option).

I would do the renovation myself in your place (this lowers X and Y, since both are calculated for the unrenovated house, but especially the renovation takes place the way you want).
Your purchase option only applies to the part the seller might possibly want to keep (and build on themselves). Whether this part is included in the later purchase can then be decided. Your current calculation (how high X and Y should be) should not depend on that.

There can be many reasons why a seller acts this way, especially in a setup with heirs/authorized representatives. I wouldn’t worry about that at all. For you, only what is in the notarial contract matters.