Did I choose the right contract?

[Collin Corrington]

I have a rental property that had a nightmare tenant.  After MANY months finally got rid of her and decided to just wash my hands of this property (that's a whole other post).  I brought on a friend (now agent) to finance the rehab so we could just flip it and cash out. 50/50 split of the profit. 

The rehab came out beautiful and the house sat on the market for 60 days at what I thought was a more than fair price, $190,000.  Total of 55 showings, 90% positive feedback, and 0 offers.  

I finally got a full price offer from some clients of my partner on this deal. (Yes, everything was disclosed many times). However, they need some help with some student loan issues before they can qualify. This caused their 3rd Party Financing addendum to be delayed while I spoke to the loan officer. But I DID sign the main contract. Also, important to know, they chose (after many warnings from my partner and myself and signing additional disclosures) not to have an option period to make the offer more attractive and to have it just changed to "pending" in the MLS. While waiting for the 3rd Party Financing Addendum to be signed over the Memorial Day weekend I received 3 more offers. I did speak to their loan officer and found out they can have this issue fixed and close by 6/19 and received the Financing Addendum. However, without me signing it, I can still back out.

Here are the offers:

• 1. Original Offer 
  • $195,000 FHA
  • $10,000 in seller concessions.  
  • No commission (it's my partner and we have an arrangement with profit splitting).  
  • No Option.  
  • Original closing 6/30. 
  • Catch 22 - They need to stay on top of their lending requirements to even get the loan, much less close on time. 
• 2.  Cash offer.  
  • $190,000. 
  • $0 in seller concessions.
  • 10 Day Option
  • Closing 6/16
  • Catch 22 - Money is coming from a legal settlement that the lawyer is holding and won't release until 6/2. BUT, no appraisal to wait on. 
• 3.  Lease Forward
  • $195,000 FHA
  • $5,000 in Seller concessions
  • 10 Day Option
  • Closing 6/19
  • Catch 22 - They want to move in on 6/1 and lease until they close on 6/19. 
• 4.  Highest and Best
  • $200,000 FHA (Should appraise for that)
  • $5,000 in Seller Concessions
  • 5 Day Option
  • Closing 6/19
  • Catch 22 - It's not cash
• Here's my dilemma; do I use a technicality to back out of my original contract and pick a new offer (This I feel is the small ethical dilemma.  While not illegal, it just feel like it's bad karma).  If I do, which one do I pick and why?