Real Estate Law USA.com

This past June I agreed on a price for a house in my town (NY).I bid below market value(back then) and it was accepted by the owner. I put a $5000.00 deposit and I provide all the documents as requested.At the end of July (when I was going to close as by my contract) I was informed that the house was going into a short sale phase and would take a bit more time to close. After numerous phone calls by my attorney and no response I’ve decided to inform the other party that I want to terminate this agreement.I sent via fedex my wishes (not a letter of essence) last week and now this week I hear from the other attorney’s office that they are ready to close the deal.My question is can I dissolve this with getting my deposit or am I going to battle for this in court?