Shame on you and your Realtor.
I do dnot know Conn., RE law. However, it is hard for me to believe that it is possibile to have an offer accepted by a seller that allows the buyer to cancel at the last minute.
Just to put my answer in perspective, laws vary from state to state. The mortgage crunch as affected many transactions. And I do not know your specific circumctances.
In Callifornia, the buyer CAN stipulate that the buyer has until three days prior to the close of escrow to remove the "loan contingency". We had an offer like that come through two weeks ago. It was rejected by our recommendation.
From a lender's perspective, three things need to happen.
1. The buyer is approved for a mortgage of a specific amount.
2. The prpoerty appraises for a specific amount.
3. the property is inspected by third partiies and is found to be what they thought it was.
At this point, there is a confirmed ability to purchase, value to purchase, and property to purchase.
OTOH, in Caifornia, 45% of escrows close late. (CAR 2997 Sellers' survey).70% of the time it is the lender's fault. So the ONLY way to make sure a loan closes on time is to have the buyer CO APP with a konwn lender to the listing agent to make sure that they close. Again , with the mortage hiccups, things cazn happen. However, the delay should be known in advance and the parites notfiied.
Not knowing the specifics of this case, I have a couple of scenarios:
1. Is the buyer closing late or not at all.? If the loan contingency was allowed to remain in effect iuntil the close of escrow, just based on your post, it is a case of shame on you and your Realtor for not being on top of it.
3. If the loan contingency was in effect ON THE CONTRACT, but your Realtor did not follow up, then you may have some grounds for damages. In California, a contingency is only valid if we serve notice to the Buyer that he will be in default if he fails to remove the contngency, then we start cancellation of escrow proceedings. If we do nothing, then the contingency lapses and it is no longer a contingency.
4. If the buyer committed some sort of fraud (lied on his loan app, for instance) you may have some damages.
I wish I had more facts. I suggest you get the facts and discuss it with yoru Realtor, his broker, and/or an attorney.