American Realty Network Inc.
Consult with your attorney on recourse, but it's not likely you'll have any.
Unfortunately, anything can happen during the attorney review & home inspection period. If you're working with a sellers agent have him/her contact the previous prospect buyer, the one that lost the bid. He/she may still be interested.
Talk to your attorney regarding recourse, but it seems that the buyer wanted it his way or no way. I'm assuming there may have been some "damages" that arose from the home inspection that he didn't want to take on (?).
Hope this helps.