Thread: Buyer Renting, No Financing (yet)! What To Do!?

Good afternoon. Here is my complex story...any help is appreciated!
We accepted an offer on our house 6 weeks ago. The buyer failed to get financing through one mortgage company and missed closing. We gave them a few more weeks and a $1000 penalty if they missed the second closing (06/29/07). They were without a place to stay so we set it up so that they would rent from us ($70/day) until we closed on the 29th. Their mortgage guy said everything was set for 06/29, and we had nothing to worry about. Their mortgage lender went incommunicado and no one can get a hold of him 06/28 or 06/29, the title company had to cancel the closing. Now we are faced with a dilemma. My wife and I are moving out of state to attend school to get my masters and her doctorate. We close on a house 08/03, which is contingent on us selling this house. Here are the options we've come up with:
1.) Do we kick them out (how easy would that be?!?) and relist our house? It took us 11 months to accept an offer; we now have 6 weeks before we move. We would probably have to give up the house we've put an offer on since we would not be able to get financing for both houses.

2.) Do we stick it out? We don't have much faith in these people. They may not get financing! When they went through the first time their loan was a 5-year ARM @ 9.5%, seems like pretty crappy credit. Would they be able to get a loan from a non-predatory lender?

3.) Stick it out, get screwed, and sue to get $$ from them? Right now they owe us $1000 by tomorrow for missing the closing, and just over $1000 for rent so far (increasing daily). Not even sure if they have that money to pay us!

4.) Stick it out, get screwed, foreclose, and dig our of our credit hole (which we both have scores over 700 right now!)? The least attractive offer...

Thanks for ANY help you can give us. It turns out our realtor is unfamiliar with this side of the process (apparently he's had nothing but fast closings), and essentially my wife and I are figuring this all out for ourselves! We are so stressed we barely sleep...