It is extremely important to choose the right service provider. Link building is a very methodical process and it can do as much harm as it can do good. The most important thing in link building would be choosing the website with which we can link. We need to analyse the website and make sure that it is not a link farm/FFA, it is from the same industry, it has good PR etc. Coming to your points I would like to put forth my views in the same order.
1) Either you give them a detailed list of websites wherein they have to seek links excluding these websites or you can tell them to do the analysis themselves.
2) Again here you should make a agreement or put a condition that the links they have gathered should be there for certain period
3) Putting it on Linkfarms or pages with loads of outbounds is certainly a point to worry. It depends on how much your service provider understands the websites from where he is seeking links. You need to work closely with him, monitor his work and tell him that you will not pay for any such websites and upon you pointing he should remove and provide you with a new link.
4) Link building is a slow process and your service provider should be knowledgeable enough to seek links from websites which give you the maximum benefit. It would be good to ask them what is the process they follow for link building for a better understanding. If possible some references.