The update on our situation is that our offer has been retracted. Their buyer said she would pull out if she couldn't complete by 4th September. So they felt unable to put us through that pressure and have said that should our property remain unsold on Sep 4th (just over 2 weeks away) then they will re-offer.
We went and saw the house we've been looking at again this evening. The lady who owns it (it's a probate sale, was her mother's house) was really friendly and was good to find out some more about the place.
I took a load of photos today which are here - we've decided we'd like to make an offer.
Would we be mentalists to ask our agents to call the people who put the offer (and retracted it) on ours and ask them if they would re-offer if we can move out in 8 weeks? They are planning on moving into rented accommodation, and that way could rent short-term and be in the house sooner rather than later.
Plan B - we wait for another offer on our place, and potentially lose the place above.
Gahhhhhhhhhh.