Contract advice needed

[Mary R.]

Noobie here, and it shows:
I just signed papers at the title company to sell a house FSBO. The buyer will be getting an inspection this coming week, and the lender will get the appraisal. I didn't expect any problems, and I have no intention of causing any.

The contract we are using is the Title Co's standard contract. There is no "time is of the essence" clause, but it says "...which shall be complied with by said parties on or before Aug 31, 2009, except as otherwise specified here in. (There are NO otherwise specified hereins")

There was a $1000 escrow payment, and it was several hours after the papers were signed the buyer called me and said the lender told them that because it is an FHA loan that it will take longer than the two weeks. They had already started their paperwork prior to the signing.

So, since this date is no longer going to work, do we need to sign another contract--an extension? Does that get done through the title company, or between us and notarized? Does it go to the title co as an addenddum?

If they refuse to sign another contract, what happens on the 31st when they can't close?
This time I will have a time is of the essence clause written in. What else should I put in? Should I give them to the end of September? They will want that, their lender told them to close as close as possible to the end of the month, but the 3 weeks to get the FHA loan done should be mid month.

I am continuing to show and advertise the property. They know it, I told her, and actually, an agent came by yesterday with clients while the buyer and I were talking. I unlocked the door and let them in. What do I need to watch out for there? Can I take back up offers? Do I need to tell the present buyers?
thanks
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