What makes a contract legally binding?

A neighbor agreed to sell me a house he owned after he renovated it. We typed up a contract stating that he would sell us the home for $200,000. Renovations have taken over a year and he now wants to sell it to us for $235,000 but we can’t afford that. And now he is trying to charge us for utilities for the house for the past 6 months. We’re devestated because he’s an old family friend. We didn’t go through lawyers or realtors to make up the contract, it was something we just put together. We helped design the house. We put down payments on the appliances. We put money into some brick work. Do we have legal recoutse to hold him to the original agreement?