A Deal Gone Wrong - What's Next?

[Tinah Canda]

Hi BP community, my name is Tinah and I'm a newbie investor in Worcester County, MA. I need some direction on how to handle a deal that has gone insanely wrong.

I made an offer on a 100-year old house for rental. My realtor and lawyer advised me that I don't need to inspect for lead and I believed them. Until I found online what the lead laws state in MA - no child under six is allowed to live in an apartment without a deleading certificate. 

After fruitless renegotiation, I decided to back out of the deal knowing I can lose my deposit. The lender was able to provide me a denial letter. Seller's attorney called my lender and bullied them into redacting the denial letter they provided. And now, seller's attorney is intimidating me into working with his client to close the deal or settle by agreeing that the deposit is now non-refundable or litigate and collect liquidated damages.

I don't have any support from my existing realtor and lawyer, they are just regurgitating whatever the seller's team says. 

Is this intimidation typical?

What happens in litigation? What are the potential consequences a buyer faces during a litigation? I thought in MA realtors can not force a buyer to buy but they can lose their deposit. What liquidated damages are they referring to?

Need some help, thank you in advance.