Owner Dies 2 days before closing

[Josh Adamo]

REALLY NEED YOUR HELP AND ADVICE PLEASE!!! 

So I was under contract on a house that we were about to fix and flip and the owner of the property was already old and on her death bed but she had her daughter as power of attorney.  Well 2 days before closing she passed away and now supposedly the step son is named the executor on the will and he is not wanting to follow through on the contract that we were about to close on. He is wanting to list the property with the same agent it is already listed with and try to get more money. We have already come out of pocket around $500 for an inspection and had our contractor come out there and give us a bid for repairs. 

If he breaches this contract and decides not to go with our offer is there any recourse we can take to at least try and get our $500 back from the inspection? I know a lot of you prob don't do inspections but this was my investors first fix and flip deal and he was taking extra precaution.

What would you do in my situation?? Thanks in advance!