If I drop a small claims file and defendants have counter suit and hired an attorney, will I responsible for their attorney fees?

Once the opposing party files a counter claim against you you can drop your offensive suit but will still need to defend yourself against their claim.  Depending on the type of claim and whether or not they win you may be responsible for the cost of their suit against you.  This is the danger of initiating a lawsuit.   Whether or not the owner had the right to keep your earnest money should be very clear in the buy sell agreement.   Good Luck, Don Eby