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The Manchester United side increased the initial offer for the Spanish international but the La Liga giants want a higher price for the player.
Real Madrid rejected the latest bid from Manchester United for Morata and they are demanding €90m (£79m) for the Spanish striker.
For this upcoming season, Manchester United made Morata their primary target.
The Manchester United side is keen to add the striker to their squad before their pre-season tour to the United States next week.
Morata is currently enjoying his holiday with his new wife and he does not want to wear the Real shirt for the next season, so he is also forward to move to the Old Trafford.
Manchester United lifted their bid from €70m to €80m but the Champions League holders rejected the bid as they want to increase the profit margin.
Last season he rejoined the side from Juventus and scored 20 goals for them in all competitions.
Along with Morata United also keen to land the Belgium international Lukaku.