Need Help BP! Seller is backing out of deal last minute!

[Sean Sakaida]

Aloha BP!

New investor in the mainland market but invest in the Honolulu market where I'm from. I'm currently in contract for a single family home in Garfield Heights, OH. Home inspection went well, appraisal went well, everything seemed great until  today our agent tells us that the seller is backing out of the deal! This is the response from the sellers agent "Seller stating that due to insufficient seller net proceeds and excessive penalties, we will not be able to move forward and close this transaction." Mind you that we only offered $1300 less than asking price!!! Crazy! I'm sure they legally can't do this but I would like anyones insight on the matter if possible.  

Is there anything I can do on my side to make the deal happen or do I need to lawyer up and get my money I lost from appraisal and home inspection. Not to mention time and other deals we let go because we had our money allocated to this deal. 

Help BP! Not a great start for Mainland buy and hold. Don't worry I'm not discouraged just would like input on the next step. 

Mahalo!