Unfortunately, as Realtors, we are not equipped to handle the legal aspects or interpretations of contract laws for our clients. Since this is a contract matter, it is best resolved by consultation with a qualified real estate attorney. As Sue noted below, if you cannot afford a "per hour" lawyer, you can certainly afford Prepaid Legal, a low cost legal service available in most states, to assist you. You can reach them at http://www.prepaidlegal.com and can sign up this weekend for contact with an attorney as soon as possible.
As a wholly "unlegal" opinion, however, contracts are, by their very nature, "push and pull" transactions that depend almost entirely upon clear, timely communications between buyers and sellers to ensure that each party understands the progression and works effectively toward closing. If there are delays in the financing and close of escrow, the Seller can certainly claim breach of the contract and move on, but seldom does this happen if both sides feel they understand the situation thoroughly, are of the same mind, and/or, if there is any inconvenience on the part of either party, the inconvenienced party is somehow compensated for the loss.
In this case, you have to ask whether or not the Seller and listing agent were apprised of the progress or problems in the loan early on or if this all came as a surprise at the end of the transaction. If the latter is case, I can understand how the Seller is now doubting whether the transaction can be completed or if it wouldn't be better to find another buyer--you might feel the same way, too, if the roles were reversed. It can often be helpful, in such situations, for your agent's broker to speak directly with the broker of the listing agent to try (broker-to-broker) to resolve the problems. Otherwise, it will become a legal matter. And, if the Seller does decide not to sell to you, the Realtors do NOT necessarily get paid as one agent noted below. The only time the buyer's agent will be compensated is if the Seller's agent is compensated for this transaction because the buyer's agent is a "sub-agent" of the listing agent. Since it is unlikely that the Seller will compensate the same listing agent twice for one transaction, and the listing agent won't jeopardize not being paid for at least one sale, there's small chance (in my completely unlegal opinion) that the Seller will be responsible for payment of the same commission twice. (This applies to California only)
Good luck with this transaction and get in touch with Pre-Paid Legal if you cannot afford to pay an attorney by the hour.
Grace Morioka, SRES
Area Pro Realty
San Jose, CA
If the Seller was in breach of the contract, it may make it voidable on your part, but it doesn't give you the right to an extension.
Anna Boyd - Re/Max Gold
El Dorado, Sacramento, Placer
Lic. # 01043604
This is a case where I have my clients call their pre-paid legal services so that an attorney gets involved, if nothing more than for piece of mind and understanding their legal rights in this matter. If you need information on that, just let me know because it's not related to being a realtor. (I don't want to get in the middle there, just give you the attorney info). At $35/mo, it'd be much cheaper to get an attorney on your side.
Hang in there. It will close but I think you need some pressure on your lender.
As Tim mentioned, if the buyer is acting in good faith, I'd push back on this one and get the managing brokers involved.
I had one escrow that went a couple days beyond and seller was adamant he wouldn't allow it to close - I just kept on proceeding forward as I hadn't been presented with cancellation. When money came in to close, seller allowed it to close.
If I was selling agent I'd be making some noise - particularly in this day and age when escrows can take longer through no fault of the buyer.