If the buyer backs out of a real estate purchase, can the realtor keep the earnest money?

Earlier this year I sold my rental property. After the closing, the buyer went to the property & was talking to the tenant who told the buyer that the roof was shot. (wasn't true) The buyer flipped out and went back to the title company and demanded his money back and the title company gave it to him. After... show more Earlier this year I sold my rental property. After the closing, the buyer went to the property & was talking to the tenant who told the buyer that the roof was shot. (wasn't true) The buyer flipped out and went back to the title company and demanded his money back and the title company gave it to him. After this happened I went to the title company and asked how they wanted to remedy this. They didn't have an immediate answer but the next day they offered to pay me the amount of money I would have pocketed after the sale & I retain ownership of the house. In the meantime the realtor informed me that I would be issued a check for the earnest money. They sent me a release to sign which I did but the buyer ignored so they told me I had to wait 60 days before they could disperse the money. After 60 days passed I questioned where my earnest money was and they said I should have had it by now. I let another week go by & asked again. I was then told that because I was paid off by the title company that I wouldn't be getting the earnest money.

#1 who is entitled to the earnest money in this situation?

#2 is it worthwhile pursuing for $1000?
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