Dear Michelle, First of all, yes, it is in your best interest to consult with an attorney right away however, more and more buyers and sellers are filing lawsuits pro-se all the time. You can do file a lis pendens on this house in order to cloud the title and prevent the seller from selling the home to the other buyers.
You are in first position and have been patient and diligent in honoring your side of the negotiation by waiting for the seller to clean up his title, etc. It just comes to show you that money and greed for the almighty dollar has a way of seeping into the most iron clad agreements. Yuck. It's fortunate for you to have found out about this other offer rather than be ousted from the transaction before you had to time to defend your position as first in line and the rightful buyer to perform per the terms in your purchase agreement.
If you can prove that you have the ability to close this transaction within the 120 period as originally agreed by no fault of your own then he has little grounds to stand on in closing with another buyer. You can sue him for specific performance and really make his head spin. But to file a lis pendens now is the best way to shake him up.
Find an attorney or a paralegal aid that can help you with the complaint and filing that won't charge you some ridiculous fee. A lis pendens is not a difficult filing but you will want to be represented by an attorney that will stand up and speak on your behalf in court, if it gets that far. You most certainly want an attorney to represent you in a specific performance lawsuit. I hope that it does not get to that point and you are able to mediate your differences to a win-win for all. Sounds like you are on the right track and have a good head on your shoulders. Go get him! And get your house! Best of luck....
Diane Wheatley, Broker