I would think that since the seller was unable to close (as they were contractually obligated to do) they would be liable to you for the damage that you sustained. Unfortunately that would require you to sue them and they appear short of cash. BG is right – your agent should have found out a bit more about this, but I think the SELLER’S agent is even more culpable. Probably doesn’t rise to the level of an Error or Omission (which agents are insured for), but I would look into it.