Andrea
The only people that should be advising you should have reviewed your purchase contract.

Just based on your post, assuming you did not remove the loan or appraisal contingency, then it sounds as though the seller needs to refund your deposit.

However, ask your Realtor, or their Broker, and make sure that they review all paperwork.

The seller can not stop you to make an offer with other property. Actually the
property doesnt appraised at the purchase price so their is no contract. He need
to sign the release as soon as possible.

As long as you had a contingement in your purchase agreement regarding finances the answer legally is no.

If you did not have that in your purchase agreement then your realtor behaved in an innappropriate and unethical way.

But I saw another posting on here where the same thing happened. If the seller does not return the money within say 48 hours I would call the police and report a THEFT!. Since the contract stated if financing did not go through you would get your money back they have no legal right to it. Make sure your realtor, and the sellers realtor are told this. Then have the sellers realtor listed on the complaint as an ACCOMPLICE. As far as I am concerned when someone takes your money it is theft. Since the sellers realtor has the money in escrow (under their control) they are also responcible for it. Once you tell the other realtor that the police will arrive at their office to investigate this theft I would think they would immediately return all moneys so they do not get the bad publicity. And IF it has to go this way make sure you have a reporter there to take pics and put the story in the news. "Dishonest real estate company steals money from clients". It would be a wonderful headline. I would also try to find the reale estate licensing board. Tell them how a realtor is steaking your money. Maybe take their license away. This is fraud, theft, and switch and bait..

If you want your cash back, play hardball. and next time, $1 is all that is legally needed for earnest money deposit. And if that is lost you would not care enough to worry about it.