Contract gone bad

[ladyjanerobb]

What is the name of your state? VA

My husband was transferred from Maine to Virginia with his company. We found a house for sale that was in the process of being built. We entered into a contract with the seller (who actually didn't own the property yet, he was buying it upon completion and then going to flip it over to us). The seller had asked for an extension to complete construction and we gave it to him. However, the day before closing our lender reran our credit report and found something that needed to be fixed which would take 5-10 days. We requested an extension from the seller and he refused. We were in a huge bind because we then had no place to live. We scrambled and lived in a hotel for two weeks and then rented a house (having to sign a 1 year contract). We asked for our earnest money deposit back but the seller won't release it. He then sold the house for $16,000 more than our contract price. Still he won't release our earnest money deposit. Should we sue? And, if so, do we get an attorney in our county (where the original house is) or do we sue in the county where seller lives? Are we entitled to damages (i.e. the difference in our contract price and the final selling price)?