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I was in a similar situation except I was the buyer. We had a verbal agreement in place. In the next 48 hours, I sold my car, talked to my bank, arranged financing, etc.
Then suddenly the seller explained he was changing his mind (for various reasons) and could no longer sell the car.
I was choked/furious but after a few days of discussion I was able to convince him to keep his word. Thank goodness.
I'm only posting this so you can see it from the buyer's perspective as well. Yes technically you can walk away but it could be douchey, depending on the buyer's situation.