Hello Pudgy and thanks for your post.
Forgive me, but I'm going to be a "cold hearted" real estate professional. I am an SRES or Senior Real Estate Specialist and the very last thing I want to see is any senior or individual of retirement age making decisions for which they are forced.
First, I would caution against ever becoming emotionally involved with a buyer. Certainly, as agents, we like to present our buyers as "people" with "families" and "hopes and dreams", but, at the end of the day, this is a business transaction that, hopefully, benefits all equally. While I'm certain your buyers are charming people, don't get too caught up in their "back story" when trying to determine how best to handle your personal finances.
Second, why are people with great credit scores and an annual combined income of $110,000 or maybe separately with an income of $110,000 each and a combined income of $220,000 utilizing an FHA loan? FHA loans are generally for individuals who do not have enough money for a down payment and who do not make enough money and/or who have poor credit scores. Yet at $110K (combined), these buyers gross $9200 per month and probably have a take home of $5300 per month after taxes. At 3.5% for a downpayment, they're only putting down $6500?? Unless they are incredibly poor at financial planning, this $6500 probably represents only 3 months of savings. Or , maybe, they're very good at financial planning and have chosen NOT to spend their savings by using an FHA loan to buy a home.
Now, the home has appraised at $45,000 less than the sales price, which may a fault of the colder weather season in Illinois that prevents a lot of sales activity. The truth is that there is very little that you, as the seller, can do to assist the buyers especially since, as you have already mentioned, you cannot afford to lower the price to $140,000 and I suspect that this would not be such a huge issue had the buyers used a conventional loan and agreed to the standard 20 percent down payment.
While the buyers consider their options (get a new lender, pay more money to buy the home or walk away), you and your agent should be working to determine the current price of your home based on comparables in the area. If the price is too low, it may be time to rent the home or take it off the market for a couple of months to allow the listing to "renew" rather than to be "stale."
Either way, I would resist the urge to accommodate any buyer while also putting your own financial security at jeopardy.
Grace Morioka, SRES
Area Pro Realty