Bank (seller) requests extension--grant it, walk, or renegotiate?

[Jason Krick]

I have my first deal under contract. It's an REO, all-cash deal. The deal was accepted 1/26, and we wanted to close by the beginning of February. I've read that banks work on their own time, but they were very clear that they wanted this deal done ASAP, and wanted forms signed quickly and expeditiously. For various reasons, I'm quite certain that they wanted this wrapped up and off their books.

After everything was completed on my end, they dragged their feet on signing the completed contract, agreeing on a settlement date, returning forms to the title company, etc.  We were scheduled to close tomorrow, and I was just informed that they need an extension to clear a defect in the title.

First, I was irritated and was just going to say okay and go with it.  Then, I was thinking to myself:  "would they have been as understanding if I couldn't perform to the contract?  Would they have just kept my earnest money?"

It seems to me that granting an extension on my end should result in a concession on their end. There's time-value to consider that my EMD is sitting there doing nothing while in escrow.

FWIW this property has been on the market a long, long time.  I got it at an amazing price, because I felt the bank needed it gone.  So, I feel like I have leverage in this situation. Should I grant the extension, but lower the purchase price offered due to the delay?

[Jason V.]

@Jason KrickIf you're sitting on another deal that's just as good as this one, but don't have funding for it because this is sitting in escrow, I MIGHT consider trying to get out of this one. Otherwise I'd just ride it out if they're asking for a reasonable extension, and you think they'll be able to resolve whatever the issue is.

If it were me, I'd be cautious about biting off my nose to spite my face by walking away.