Really quick real estate contract question...

It depends on what the contract said and what the laws are in that state. But, generally speaking, a contract to sell a house isn't worth much. The buyer can usually get out of the deal if they don't get financing and can pretty much chose to cancel the deal for any reason after the inspection.

I know that in LA there isn't much you can do. In fact, the "earnest" money that is paid is often times not really "earnest" money and is refundable to the potential buyer. It's also why real estate agents in LA tend to still show homes that are pending sale and list them as pending but showing. But, it depends largely on the terms of the actual contract.