In my experience if the seller signs the contract that is what the bank works with. The rest would be back ups in case the first contract fell through. Unless,of course, it was a multiple contract situation to begin with. Now, if the seller does not sign the contract and it is submitted unsigned then yes, most likely contracts will continue and a highest and best when the bank comes back. I have represtented buyers in both situations and when the seller signs the contract really works well. With my short sale listings I do it the same have the seller sign and submit and if through the process others would like to write it would be a back up.
Hope this was helpful,
However, once the higest and best offer is accepted, it still moves at a snails pace as the paperwork moves through various departments, each equally as busy as the previous department. A recent accepted offer was submitted first week of September and just yesterday we were informed it was accepted and looks to close mid-January. Meanwhile, we continued to look at other homes. Hope this helps you!