FTHB … Bought house… closing in October. Now it became power of sale(Ontario)

I am a FTHB bought row townhouse in Kitchener Ontario area in June. All paperwork and everything done. Offer got accepted, inspection is done, mortgage approved. Just a waiting game for closing on October due to sellers condition. Today got a call from lawyer that due to sellers defaulted on mortgage payment this house has now become power of sale.

So issues we are facing:

1. Bank wants more money than agreed offer that was expected by seller earlier.
2. They want quicker closing within week I guess and it’s not possible for us due to funds getting allocated based on closing date that was agreed.
3. Things were added as condition to be fixed before moving ( AC, Furnace and Fridge ) is not working. And now due to power of sale it’s as is property.

What are my options now and if I need to get those fixed how much usually it cost. Or Can we counter them to fix or reimburse for that or just walk away from it.

Note: Property built is 2021 if it makes any difference.

we got this property 40k lower than actual market value based on near by houses those sell within last month. But now due to non payment to mortgage bank taken over the sale.