We had to outbid 12 other offers for the priviledge of paying $928k for a house that was listed at $750k. Five years later it's "worth" $1.4M and would sell in a heartbeat. No fucking way would I pay what its "worth" now. Just sayin'.
When I sold my previous house, my trusted agent had to be nudged a bit to list it for $539k. We were all shocked to get multiple offers, two of which were $600k. I thought the buyers were crazy. It has since come up in value so much that I wouldn't pay the selling price or the new value either.
I kind of like the way they sell houses in countries where it's strictly an auction. Sure, a buyer might "overpay", but if they hang onto it long enough and take good care of it, someone will most likely be willing to "overpay" for it again when the time comes.
@Case, by now I hope the closing process is well underway and everybody's happy.