You need to review your contract to see your remedies for this situation. Some contracts provide that a party will be liable for certain costs if a sale is not closed, so you may be able to recover your closing costs.
You can probably sue. Even if you decide to go to small claims court where you can sue for up to $7,500, it probably wouldn't hurt to at least have a consultation with a real estate litigation or general practice attorney to review your contract, any addendums, and the seller's property disclosure and give you some pointers before going to court.
The foregoing is for general information purposes and does not establish an attorney-client relationship.