Just happened to me. Made an offer on a property that had been on the market for a while and not selling, negotiated over several days, upped the offer, and the seller accepted it. Seller’s solicitor sent mine the contract and before we could sign it – just a few days including a weekend – the seller accepted a higher offer.
The way I think about it, rarely does someone tell you the value he puts on his reputation. The amount a seller takes in a higher bid over one he has already accepted does just that. In this case, not really very much. I guess he’s in a position to know what his reputation is worth.