So tell me, what are the penalties

if the contract expires (which will be on 8/1) and we haven't closed yet because its the sellers fault? (You can see my previous post for reasons why).

What are the penalties for the seller?

We don't want to walk away, since it would take us at least 2-3 months to find something else on the short end, and we love the house.

Re: So tell me, what are the penalties

I believe if you walk away you will loose the down payment. I would really ask your attorney what to do because if it's their fault why you can not close then you might be able to get your down payment back. I am not sure what happens w the bank you are approved from for the mortgage. I think they do not process loan. Sorry this is what your dealing with right now.