House is gutted, flooded in Hurricane Sandy.  Most of the drywall, all of the flooring and all of the appliances were removed right after the water receded.  The value is in the land and location.  House will need to be lifted if it's renovated, or torn down and replaced with a house on pilings.  Current buyer intends to renovate and lift.  Buyer is looking at having to put $150K+ into the house to finish it and bring it to the new elevation requirement.

My seller left the light fixtures up because they weren't damaged by the flood water.  Both my listing agreement and sales contract excluded the dining room chandelier from the sale.  When he removed the chandelier, he also removed the several matching light fixtures.  The buyer is OK with the chandelier being removed but wants the matching light fixtures returned or they're killing the contract.  Seller didn't realize he had to leave the matching fixtures, is willing to return the 2 larger lights, but said he no longer has the 2 smaller lights.

It's breach of contract on my seller's part, but since he can't return ALL of the lights since he no longer has 2 of them, can he rectify the situation?  Buyer said they may accept a credit for the missing lights, but I doubt the bank will agree to that.  Seller refuses to buy the 2 missing fixtures.  The fixtures he removed are only worth about $200.

My feeling is the buyer either accepts the house without the missing fixtures, or kills the contract and I move on to the next back-up offer (and I specify in the contract that the fixtures are not included).

The mortgage just changed servicers, so I'm starting over with the approval process anyway.

Anyone have any other ideas how to handle this?