Real estate agreements must be in writing and agreed to and signed by both parties... In the case of a purchase transaction, it would require a fully executed (signed by all parties involved) sales contract.
To avoid this issue in the future, once your offer is verbally accepted, request for a copy of the agreement in writing... It might not have helped in this instance, it sounds like the sellers were flaky and got a higher offer last-minute...
Good things happen to good people so go out there and find yourselves another great home!!!
Good luck in your search!