Husband and I are trying to buy a home?

The banks reduction in price is a primo motivator for buyers to appear out of no where, thus I believe the claim that there are multiple offers. The house sounds like it is priced well below market and you are betting that you, and all of the other people making offers, that you can steal it for even less. I bet you will be kicking yourself well into the future for not offering more for the house you "really wanted". Still, I agree that you need to stick to your guns about knowing what you can afford in our troubled economy, but will likely have to continue to shop after you miss this opportunity. Good luck!