Help!! The seller of our new property is refusing to settle!!

[Perp]

This has given us a little longer and have applied for a rental. Fingers crossed.
For anyone else in this position, the lawyer has now sent the vendor a letter putting him on a default notice, this gives him 10 days to settle.

Have you thought about what you'll do with regards to your new rental tenancy if he decides to settle within that 10 days? (Though it's unlikely, you've already discovered that the unlikely can happen.)

This has been a truly awful experience for our entire family and the frightening thing is there is nothing we could have done differently or nothing we can do to stop this.

I hear you, it sucks. I had a solicitor's conveyancing error about 4 years ago cost me several hundred thousand $, and I'm still daily suffering the financial consequences. It's hard not to be bitter.

His house went on the market in December and in May he apparently was informed by his bank that he could not sell.

That certainly happens. I'd suggest that he's cross-collateralised, and by selling this property he's reducing the overall security to the bank for his debts, to a level that the bank isn't happy with. Yet another good reason not to cross-collateralise.