Practically it never happens

Remember real estate law for your states always supercedes the contract. As long as the law allows the buyers to back out, it can happen.

However, the seller can make the process of returning the deposit very hard and lengthy. When the buyer backed out of the house I had for sell with no reason, my agent basically purposely acted very slow as the title company needs my agent's authorization to return the deposit. My agent then asked the buyer to pay for the inspection (about $900). Legally, my agent has to authorize the return in 30 days. But since the buyer was in such a big hurry, and with an buyer's agent that is totally unprofessional, they agreed. So I basically saved $900 on my transaction as I passed the inspection report to the next buyer.