Negotioating when a buyer requests a closing "extension"?

Question

I have a property with a signed purchase agreement that indicated financing was to be secured within 30 days. The buyer is past the due date and just notified us that he was not approved for VA financing and is now pursuing FHA financing. He is asking for an additional 3 weeks for closing (move from Aug 1 to  August 21.)  The understanding is that he has a good job/position, so he should be eligible for conventional (maybe it's a downpayment issue?)

I had a renter lined up before the June sale and have now lost a month of rental income ($750 July) and will lose 1-2 months more, should the financing fall through. At this point, my goal is definitely to sell the property (as it's not one I want to own long term) and I'd like to secure my interests as much as possible.

Couple of questions:

1. any way I can protect myself from another potential delay if I grant the extension? can i ask for some other requirement on financing?

2. any ideas on negotiating my "cost" due to the closing extension (ex, another mortgage payment, insurance, utilities, etc.)

Unfortunately, I only have $500 in earnest should this go south.

Thanks all!

Christine C. · Answer

great suggestion on the non-refundable deposit.

Thanks Curt.!

Curt Davis · Answer

1. Get a new pre approval doc from their lender stating they are approved.

2.  If you can get them to agree on additional fees good luck!!

3.  Keep in mind if they get turned down again for the loan you will have to give them their $500 earnest money back.

What you might want to consider is tell them if you do give the extension for them to try alternative financing options you make the $500 no refundable regardless if the loan does not go thru.