@Linda1274 I think the rep you were dealing with gave you incorrect information. The cancellation policy that was in place when the guest booked is the one that applies, changing it after the fact won't apply to already booked reservations.
The way you could have gone about this (And the rep, if they were competent, would have told you this) was to apply to Airbnb for cancellation under the "extenuating circumstances" policy, as you are selling and won't be hosting anyomre, at least in that house. That would be a neutral cancellation, and neither host nor guest would be penalized.
I would contact Airbnb again (don't continue the conversation with the clueless rep you had, just start over, hopefully you'll get someone more savvy) and pursue this line, making sure they understand that the guests who went ahead and cancelled need to be refunded in full.