Can I back out of this deal with my earnest money?

This is a question for your lawyer as it depends on the contact you signed.

Even the most rudimentary purchase contract ought to give you termination rights. But i fear you were under-represented if you are asking such questions here.

I can't give you legal advice, but what was the closing date in the contract? Once that closing date passes, usually either side can call for "Time is of the essence" to kick in and force a "close or be in default of the contract" situation.

Most contracts would protect you in the case the seller misrepresented ownership. This is pretty standard stuff. But please ask your attorney!

In most contracts the seller represents they are the sole owner with the full rights to sell the property. As Squid said, this is pretty standard. Please ask your attorney to confirm.