I know this is frustrating for you, especially if you have put another home under contract, and it was unfortunate that the buyers agent was not more forthcoming by emailing instead of calling and communicating with your agent. I am sorry to see you go through this, I hope you will have a new buyer quickly.
I agree, this is probably just an excuse but the best advice and the same I would offer was given by Cheryl Lyon.
I am sure you can relate that buying or selling a home is a huge emotional roller coaster. Unfortunately you now get to go for another ride, but you have representation. Your agent & their principle broker work for you & should be able to explain all of your options & help you through this issue.
I hope that you can get past this speed bump quickly & find another buyer for your home.
16.1 Buyer Default. If Buyer defaults, Seller may elect one of the following remedies: (a) cancel the REPC and retain the Earnest Money Deposit, or Deposits, if applicable, as liquidated damages; (b) maintain the Earnest Money Deposit, or Deposits, if applicable, in trust and sue Buyer to specifically enforce the REPC; or (c) return the Earnest Money Deposit, or Deposits, if applicable, to Buyer and pursue any other remedies available at law.
If the buyer faced loan denial, or was not satisfied with the loan Terms under section 8.3b of the Utah Real Estate Purchase Contract, you would be entitled to the earnest money and nothing else, if you are past the deadline for loan denial.
If you are selling by owner and have not used the REPC, then what ever your contract says is what you are entitled to.
This is a frustrating situation for you... I AM sorry. I hope it works out better for you in the future.
Utah's new Real Estate Purchase Contract has specific protections for both the buyer and seller. Check with your Realtor to learn and understand how your specific contract was structured. They can then give you the guidance you need.
Coldwell Banker Residential Brokerage-Utah
What did your Realtor say?
This is not legal advice. For legal advice see an attorney.
My guess is that they could be sued for "specific performance", meaning that they signed a contract to purchase the property, so they need to "perform", which means take title, and have their lender pay you.
The only reason of which I am aware is if there were some significant change in the condition of the property before closing. My favorite story is about a buyer that did their closing inspection and found that the hotwater tank had broken, flooding the house, and ruining the wood flooring. That accident would certainly be grounds for cancelling. In this case the seller had the flooring repaired to the satisfaction of the buyers and the purchased was delayed, but eventually closed.