Looking for a house can be mind numbing for sure. My wife and I looked for almost a year before we finally found the one that we settled on. Now she has been looking off and on for us to move to a new place. I remember when we were looking before we put a bid on a house near some friends of ours. We weren't the highest offer, but our financials were much more secure than the other people. They ended up going with more money even though there was more risk. It was so disappointing for us, but it helped us find our current place. As I said, now we are considering downsizing, so who knows where we will end up. I'd like acreage as well, but the market and prices are nuts right now.
There's a lot to be said for going with the (more) secure money over the higher number and I've seen people take the risk for a small monetary gain time and time again only to have the deal fall over causing them to go back on the market and waste time and lose money as well. I suppose the risk people take is dependent on their situation.
Yeah, I can't imagine we were that far off from the people who got it, but who knows. I think we ended up with a nicer home in the long run.