I can tell you it does happen. I just recently lost a short sale and the person waiting behind me get it instead. I totally thought I had it but bank came back asking $30k more than I offered after 4 month of waiting. It was not just “a little bit more”, it was lot more for me. Thought about counter bank’s counter, but was told there was a buyer bebind me offered 50k above mine. I did the counter anyway and try to meet the bank 1/2 way just for best effort but no…didn’t get it. Bank didn’t waste any time with us and just went with higher bidder who would accept their counter. So I guess if you have offered much higher than asking price, you still have a chance that first inline would back out after shocking news came back from bank. >>.<< With that being said, the chance is not very high though, because I have never hear back from other 1/2 dozen place I have backup offer on. One of them was even on the market when we send in the offer. And only to be told by the listing agent that seller has accepted another offer right before and he will change status like NOW. make me wonder if I should have wake up 6am in the moring and wait outside listing agent office instead of send in during the day. Did I miss it by like an hour or 10 minutes....this kind thoughts realy get me depressed =(