seller not accepting termination of contract and seeking legal action - what to do?

[Kristin Solbach]

Hi everyone, I posted this in the legal focus but not sure how much attention it gets there so I hope you dont mind me posting it here too.. We were in the process of buying a house in Idaho Falls but terminated the contract two days ago because of too many red (illegal) flags and things that came up during the appraisal. The seller never signed the termination and instead we now got a letter from their attorney giving us the following options: They’ve laid out three possible courses of action:

1. Specific Performance – Forcing our LLC to complete the purchase.
2. Monetary Damages – If they sell to someone else at a lower price, they could claim the difference and legal fees.
3. Earnest Money Forfeiture – they’re keeping the $1,000 (which we instructed Title to do anyway)
4. Closing date is set to tomorrow (it was a 3 weeks closing) and title still has it on their schedule. Does anyone have any advice and/or an attorney in Idaho for me that could help?
5. 
   Thanks a million, Kristin