It happens. My buyers had an accepted offer less than 24 hours old and were preparing to call their home inspector when the listing agent called me. A competing offer raised their bid to a number higher than ours, and the seller was giving us the courtesy of a chance to match or beat before they considered switching horses.
We do it a little different here in New York; attorneys prepare contracts, and until they are signed, anything can happen. Most times you get one buyer. No issues there. But even in this market, nicer homes can get competing offers. Often, if all offers come in at the same time one decision is made and it is clean going forward. However, sometimes you get a late entry, and that is when it can get dicey. Many sellers never switch buyers because they gave their word. Some let the math guide them and do switch.
Occasionally, I have seen the seller bump Buyer A in favor of Buyer B, and when Buyer B falls through Buyer A has moved on. They've gone from 2 buyers to zero. That isn't a nice feeling.
In our case, we are buyer A and all indications are that Buyer B will get the house. My people elected to stick with their bid, because they felt that the seller should honor their word, but spoken words don't hold up prior to contracts being signed. There is nothing I could have done short of beating them up to raise their bid. I couldn't speak with the seller, and nothing I said to the listing agent could change the seller's mind. In their view, we had our chance to raise our number and didn't.
Still, they are now very discouraged. It is part of this business; sometimes you lose a house you really wanted. They have laid low the past week, and while I certainly hope they don't blame me, emotions run high and anything can happen going forward.
There really is a "wild west" component to real estate that is rough on people- buyers, sellers, and yes, brokers.