I agree with Jeremiah. It is a common practice by the banks. I doubt the listing agent is the one asking for all contingencies to be removed. The listing agents have little or no control over the banks.
I don't think lowering or raising your earnest money will make a difference either. The things that make offers attractive to any seller are always the price, terms, conditions and the ability of the buyer to get their loan.
And, no. Your offer coming as an owner-occupied will make no difference to them. There are occasions with Fannie/Freddie/HUD homes where it makes a difference, but you indicated there is already an investor offer. If that is the case, the home is open to anyone to purchase.
Only you can make the decision if the home is worth removing all contingencies, and of course, I don't know what contingencies you have in your offer. When they ask for highest and best, I always tell my clients to do just that. Make it your highest and best, but don't let the frenzy of a bidding war make you overpay for the home. Inventory is somewhat low, but there are homes out there to purchase without overpaying.
Jo Ann Schlott