What is the name of your state (only U.S. law)? Tennessee

Hi, We have been trying to sell our home for the past 3 months, 2 months ago, we had an offer from a hispanic family with Su Casa Century 21 Realty representing them. We accepted their offer and they said they wouldn’t be able to close for another month because the loan may take a while. Because they are illegally in the United States, it was going to be harder for them to obtain the loan. HOWEVER, the home seller ASSURED us he was a legal immigrant and had the proper documents and a social security number, THEREFORE, we agreed on their offer. In the meantime (1 month before the closing date) we had numerous interested buyers that loved the house, and wanted to make an offer, but we turned them down because we RELIED on these buyers to buy the house. A month later come closing time, we get a call from the lawyer’s office saying they’re not ready to close. Then on, we try calling the realtor almost EVERY SINGLE day, without getting a response. We just wanted a reply. We wanted to know what was the issue etc. The realtor doesn’t speak much english either, and whenever I’d call the office a REALLY rude lady would answer the phone and inform us that she’s not there and she’ll call back, but we’ve NEVER got a phone call from the actual realtor, she did actually email us telling us, because the home buyers couldn’t afford the house, bc they weren’t able to get the originally loan offer they wanted (they actually ended up having to pay a higher interest rate, and they “couldn’t afford it”) they would receive the earnest money back. An acquaintance of mine’s father is a lawyer, and i talked to her. she told me that the buyer NEVER gets the earnest money back. She suggested that we sue them for breach of contract. She said because we RELIED on their buying the house to pay for the mortgage, we should sue them and get the lawyer fees, earnest money, and detrimental damage back. My question is, Is this really true? what kind of action should we take? I’ve called the realtor’s office countless times, and the lady that answers the phone has ALWAYS been EXTREMELY rude and told me to have our lawyer contact them. WHAT SHOULD WE DO!?!
P.S the lawyer friend of mine said we could sue the buyers for breach of contract, and attach SU CASA REALTY CENTURY 21 onto the lawsuit so if the buyers decide to flee the country, Century 21 would have to assume the responsibilities. Is that right??

ALSO: Can I report this to the Better Business Bureau?

THANK YOU SO MUCH FOR YOUR HELP!
to reply to Kemkerk: we did NOT know they were illegal, we only found out AFTER they backed out that they were illegal. We were ASSURED by the buyers they were legal citizens!

Othniel: We were For Sale By Owner, but we did have a friend of my mom’s who’s a realtor’s help!

WE REALLY Relied on these buyers to pay for the house, we already bought a new house, we’re paying mortgage on BOTH houses right now and it’s REALLY hard on us. Is there ANY WAY we can be compensated for our time investment and the potential buyers we lost in the process?