Way Off Topic-- Contract Decisions

Quick responses requested:  We listed our house for sale at the end of December with a local realtor.  Toward the middle of January, we negotiated and agreed to a lower asking price and signed a final agreement with a person interested in purchasing our home with a closing date of February 15th.  We were verbally asked to extend the closing to February 23rd which we did.  Since then, the buyer has requested another extension to a closing date of March 29th due to a financing problem.  Our house has been in "pending" status since January with the Multiple Listing Service and would stay in "pending" status until March 29th... thus no strong action from other buyers or other realtors.  This contract includes the buyer's ability to back out depending on the result of a home inspection so no guarantee the buyer will buy.  Our realtor is encouraging us to sign the extension request, wait, and take our chances we'll have the house deal wrapped up by March 29th.  I can't help wonder if the realtor finds agreeing to this extension easier than re-listing, re-showing, and re-finding a new buyer.  Our preference is to not extend the contract, let the February 23rd contract expire, move on with putting our home actively back on the market, yet invite the interested buyer to re-contract with us if and when his financing comes through.  Our realtor warned most interested buyers will not re-contract because their extension request was not honored.  If we go against our realtor's advice to grant the extension, then we run the risk of a strained relationship with our realtor who we are under contract with until June.  If we grant the extension and end up not getting a house sale, we will have had almost 3 months tied up with this one potential buyer.  We have been told by respected professionals in our area there is a shortage of homes in our price range.  Learning that, we think interested buyers won't be an issue; we even wondered if we should hold firm on our original asking price this time around given the shortage.  

Our answer is due:  #1 grant the extension for only a possible sale at the end of March or #2 not grant the extension and move on with actively having our home back on the market.  Why or why not?  Thoughts and considerations we haven't thought of?  Thoughts on going against realtor advice?  

This is your house, your realtor works for you.  If you want to pass on the extension and then relist, you should do that.  This buyer is stringing you along and if it was me, I would likely pass on the extension and relist.  But I guess it's going to depend on how desperate you are to sell. Do you have the luxury of waiting until after June when you can go with a different Realtor if this one gets pissed at you? 

I don't know where you live, but houses are flying off the market like hot cakes around here... relist and sell to whoever has the money... it's a business deal.

It's getting to be spring.  The housing market almost always improves in the spring.  If there is a need for housing in your price range, I'd not grant the extension and take your chances.  With a stronger market, you might even get a better offer.  3/29 is an unreasonably long time to wait.  You could counter with something like 3/1?

I would be worried about the buyer suing you if you cancel the contract at this point, so I think you should take into consideration whether you think the buyer is that type of person or not. Most people would not as long as they are not losing any earnest money, but some people like to sue.

I wouldn't grant the extension past the 23rd. Relist. I got strung along once, and would never do so again. Tell the current prospective buyer you'd be glad to sell to them if they find financing, but in the meantime, it's going back on the market.

Then tell the realtor to do a better job, and find a buyer with preapproved in place financing, or you'll find a new listing realtor in June. Realtors usually make half the commission on a listing, and half on a sale. It's easier to find another buyer than it is to get a new listing.

When the Fed. raised the interest rate recently. I believe they were attempting to slow down the housing market from another artificial bubble. It will be harder for people to secure a loan in this new environment too.

Do you have earnest money yet? It is a little hard to advise because each state is so different in it's approach to real estate. But it sounds like they have you where they want you. You lowered, and are waiting. 

Do not extend to the end of March.  What happens when March 29th comes and the buyer asks for another extension because their still having financing problems.  Sounds to me like the buyer hasn't been approved yet and is hoping to  be at some point.  The realtor should have asked them if they were preapproved before having them sign any agreements.  Strike 1 against realtor.  Strike 2 is the realtor allowing them to do verbal extensions.  Personally I would not wait for strike 3.

Thought is the realtor representing both you and the buyer? 

The realtor can get all pissy if they want, but they work for you not the other way around.  Sounds to me like they are one of those lazy realtors who want to do as little as possible, but get the commission on the sale. 

Agree with  most of the above posters. This is not personal--it is a business deal!

I would personally pass on the extension and let the buyers know you just cannot wait. I'm sure your contract was contingent on them obtaining financing by a certain date/or closing by a certain date, so they have no grounds to sue.

And if the realtor gets crappy, you can probably get out of that contract, remind them they are paid to work for you.

Your buyer has demonstrated an inability to close.  Decline the extension, end the contract, tell him he is welcome to make a new offer when his financing is approved, and put the house back on the market.  My experience is that the March deadline will come and go, and he still won't be approved.  Since you have other realtors telling you that there's no slump in the market in your price range, move on and see if you can catch another fish!