Seller trying to back out?

[buckle]

What is the name of your state? Iowa

In January we (and sellers) signed a purchase contract and gave earnest money with the closing to be on 1-30-08. Appraisal, Inspections, etc. all done by us. Seller called days before closing and said the property is still in probate. They (2 sisters) will sell us the house on 5-1. We understood, seller apologized for mixup, said OK. Mortgage company also contacted sellers and got same story. We were able to keep our financing because of that without any penalties.

We kept in contact, by phone, with seller every few weeks. Seller would have us check on property, nobody lived there and it's in the country. Everything was still on track.

Fast forward to April 23. Bank called to see that May 1 is still closing date, they need the name of the title company. We called and left this message with seller. Seller called back and left message saying they are not selling to us, they've decided to sell to her son/nephew. We do not agree to this. Documents have been signed, we've given our notice, etc.

Son/nephew moves into property on 4-26!

We've hired an attorney, but he's unavailable until later in the week. Sellers are saying MANY things that are untrue. Forced to sign, gave our money back, never signed. It's crazy! Meanwhile this kid and his girlfriend are living in our house! They're tearing out carpets, drapes and other things and burning them. They've started renovations.

Attorney has sent letters that sellers ignored. Sellers got an atty, our atty spoke with him. A few days later they hired a different atty. Our atty has spoken/written him. We were going to file for specific performance, now she wants to pay us a piddly 2,000 (we're already out more than that) or go to mediation instead. Opinions on our chances?