The risk I often see is both don't close. You make number 1 go away and then number 2 backs out for some reason and you go back to number 1 and they are now on to a different property and you are left with no buyers. Can't tell you how many times this has happened.
Why did #2 offer $30000 more?
I know it is tempting, but price is not the only consideration in offers in my opinion.....there really are 8 more pages to the contract that matter. Closing dates might matter, financing might matter, who they are getting financing from, inspections, and on and on. Do they both offer the same earnest money, option timeframes, etc?
You are pretty far along with buyer #1...I think your risk that they close is minimized the closer you get to closing....you know about the potential deal killers at this point, except for financing perhaps. Making them go away to me opens a whole new set of negotiations with #2.
How long has the property been on the market....if just 2-3-4 weeks and you got two great offers, it will sell if #2 goes away in my opinion. If these are the first offers in 6months, I'd stick with #1....but of course we don't have all the information here to walk you through all the steps.
I guess too if #1 gets upset, they could tie you up in litigation where you can't sell to #2, even if you have deleted some of the normal seller default language. They might not win, but you never know until you get in front of a judge. I can hear a judge saying the contract is unfair and one sided and therefore he will allow the sale. Who knows if a buyer would take it this far....but there is a risk.