One reason I can think of is because the bank does an appraisal and may reject the loan if the appraised price is too low. They don't want to be stuck with a ho

One reason I can think of is because the bank does an appraisal and may reject the loan if the appraised price is too low. They don't want to be stuck with a house worth less than the loan. I had this happen several years ago with a house I bid on (I was also pre approved and all that stuff).