contracts and offers

As a buyer, I made a cash offer for a condo that was higher than an existing offer that had just been verbally accepted. The seller's broker, a moron and slow to move in every way, told me that they had sent out a contract one hour before my offer came in. I sincerely doubt he even told the owner of my higher offer. All he told me and my broker was that they wanted to do the ethical thing and honor the first lower offer. I had already sumbitted all my documentation proving that I was a legit cash buyer. I've never heard of this - going with a lower offer and no contracts signed. Yes, I am pissed off but I'm also perplexed. Perhaps I am just being a sore loser. However, if I were the seller, I would go with the higher offer in cash. Any thoughts from any of you all?