The possibilities are:
1 - The seller lets you out of the transaction and may or may not keep your earnest money deposit. If they have a secondary offer already in place, they may be leinient with you.
2 - The seller sues you for specific performance, meaning they will force you to close on the home as agreed upon in the contract.
3 - The seller lets you out of the transaction, gives you back your earnest money but sues you for damages (time lost on market etc. This could be huge because they now have just over 30 days before the tax credit deadline and could very well be on the market a long time after that.
4 - Long shot, but the seller may renegotiate some terms of the transaction with you to keep you in the deal and close as agreed upon in the terms of the contract.
What you really need to do is to talk to your agent and attorney. They will advise you best.
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