COE +2 or +3 are not uncommon, however it does cause additional stress for the buyer. If the added days were not part of the original agreement but was offered up in the final weeks, I would have heartburn, as should the bank with the short sell. I would be surprised if the bank allowed it to occur, once an approved short sale, it is their transaction.
In any situation where keys are not transferred at close of escrow, a penalty should be in place that is enforceable by minimal effort. I have used $100 per day or more if they are not 100% out at the terms of the agreement. I am far less comfortable giving additional days on a short sale because of the length of the entire process. A standard sale however could mean that the listing party is also purchasing another property, and timing is important when it comes to escrows and moving companies. Flexibility in that case can make your offer the winning offer.