Legal Question in Real Estate Law in California

If the buyer cannot close escrow because of something they have control over, they have breached your contract and you can sue for damages or specific performance. Whether you are entitled to keep the money deposited into escrow by the buyer depends upon the contract; if the contract says seller is to keep the deposit as liquidated damages in the event of a breach, then yes, you get to keep the money. Be aware, however, getting the money out of escrow may be difficult unless the buyer is willing to sign escrow instructions to allow the escrow holder to release the funds to you. In fact, without the buyer's instruction, you will probably have to file a lawsuit seeking a judgment against the buyer and/or a declaration that the money in the escrow belongs to you.

Did the buyer put a financing contengency in the contract? If so, did they release it? If there was a contingency and it was not released, you probably have no recourse.