Sellers Changed Minds on Selling Home

What is the name of your state? CA

We have eagerly searching for a specific house and plan in a particular neighborhood. We recently placed a offer on this home and the sellers countered with small changes to the financials, meaning, where our funds our coming from, etc. Then we accepted and returned the counter offer and they signed as well. During the first 2 weeks in escrow, we have been selling our home, cancelled a vacation in which we lost our deposit and vigorously been shopping for furniture to furnish our new dream home. Just this week (3 weeks into escrow), the sellers said that they changed their mind and do not want to sell any longer. Their circumstances are: their family live nearby, the location that they were going to buy another home ended up to be too expensive, and a new job offer fell through. These things were not contingent upon the sale of the home and are not listed in the contract. We put down $10,000 as a consideration for the purchase of this home as well. In the meantime, they have sent us a letter indicating their apologies on their change of mind for selling their home. We returned the letter stating we sympathize; however, we still want to purchase the home. Now they sent us a letter stating that they will give us $5,000 to settle and breach the contract. We still want to purchase this home, though. It is perfect for my family and me. We can’t help but feel that they may want to try and sell the home for a higher price, due to the rise in the real estate market. Please advise me on our options. Also, how often can a buyer win a case in this situation through arbitration?

[JETX]

"Please advise me on our options."
*** The options are simple....
1) Negotiate a release of their contractual obligation to sell. Of course, any offer to compensate you would be in addition to a FULL return of your earnest money.
or
2) Talk with a local attorney about a 'breach of contract' suit against them. If you have a signed contract, your chances of success (or more likely, settlement) are very good.
This happened to me once and after a year of litigation, the seller eventually settled with a cash payment, lowering of the original contracted price (and sale) PLUS payment of all attorney fees incurred.

[HomeGuru]

2 words: specific performance
3 words: breach of contract