Is it impermissible to sell an apartment to another buyer at a higher price after agreeing with a first buyer and receiving a deposit from him, then returning the deposit to him?

If the seller and the first buyer agreed to sell the apartment, and they parted ways on that agreement, then the sale became binding and cannot be annulled except with the consent of the first buyer. Accordingly, the sale to the second buyer is void, because it is selling what the seller does not own. The second buyer must be informed of the truth of the matter. If he agrees to return the apartment and reclaim what he paid, then praise be to Allah. Otherwise, the first buyer has the right to take the matter to court. The seller must seek Allah's forgiveness and repent to Him for what he has done.