Persist with a buyer or give up?

Got an exceptional offer on our house in the outskirts of Sydney, only trouble is that 2 and a half months later the buyer doesn't have finance so is not even unconditional.
If we'd have known it would be this long we would have pulled the plug long ago. Main reason we have hung on is that we wouldn't get that price again. One of our neighbours with a comparable house can't get an offer close to his asking price which is $15g less than our price. There are 2 more similar neighbours houses that will go on the market in the next few weeks.
We know that there is a backlog with the banks and they are at MLI stage submitting extra documents that they are asking for.
We are concerned as we've just discovered they only have 5% deposit and they're FHO. Should we offer it to them at a lower price or should we just hang out and see if it comes though and if it doesn't then lower the price for them. Hubby wants me to ring up now and offer it to them lower as it may hurry things along but I just don't know. Or should we just give up on them and start from scratch?????
I'd hang on, the banks are slowly working through their back log. Can you get your estate agent to keep registering interest iwth other buyers in the meantime? I doubt reducing the price to these particular borrowers will make any diference, if their application is going to be canned, it will most likely be about their lack of deposit or savings history. Only if you know the banks valuation has come up short would I suggest considering lowering your price, and then only if you could find out if they can still proceed with the lower price.
Hi Livingstone,

That is a not unfamiliar story. Before you pull the plug - a couple of Qs if I may?

What suburb on the outskirts of Sydney?
Listing price that you had it 'sold' for?
Anything else relevant to the property itself?

2 and a half months?! Goodness, I hope your agent was still showing buyers through the property, unless you were silly enough to allow the cooling off period to be continually extended (not something I'd recommend in this market). Yes, amazing results are being achieved, so why not give a chance to other buyers? Give this buyer an ultimatum on time (time lapsed already is WAY too generous) and let other purchasers have a dig.
Best of luck :)
Get the agent to actually find out why it's taking them so long. It does occasionally happen, but in general lender's aren't that bad right now.
I definitely wouldn't drop the price; there's no point. They're still going to need a huge loan and it's not going to happen any quicker; you'll just get less money.

But I would definitely be showing the property to other buyers, since I understand you can do that in NSW (which I find bizarre, but that's another story :p).
Is there a reason that there offer is so high? Have they offered more than the bank will value? If yes it may fallover at the valuation stage.

Could you vender finance 15% to get them over the line faster and make a win/win

Ps there only a buyer if they can fund and 2-3 months is along time if there is no problems, If there is problems hopefully they are honest enought to tell you
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2 and a half months is a bit rich even if 2 lenders have been approached. I would suggest the MC broker hasn't put the deal together 2 well and keeps having to get additional info. I would have you solicitor request from there end a conditional approval "subject to LMI". At least this way you will have it confirmed as to where they are at and also as to when it reached this point.

When was the last valuation done and was it on behalf of the current lender they are approaching?

Do you have any idea who the lender is at this point? Some QLD MB's on here maybe able to give you an idea on there processing times for that area.

I certainly wouldn't be dropping the price for them. As mentioned, it would most likely make no difference. If they can't get a 95% deal then that's it. They need to look at a 90% deal or have you cut the price in half so their 5% deposit turns into 10% 9unless they have almost 10% to hand.

Hopefully they aren't delaying until the S/E applicant's 08/09 tax returns are available as this could drag on a bit.
2 and 1/2 months later its unconditional!!!!!!!

Buyers got finance today, we are over the moon!!!!!!!!!!!!!!!!!!!!!!!!!!
We got top price (thanks FHOG and thanks God)