If you are purchasing your first or second home, you want to make sure that you are getting a fair price. The sellers typically want to get the most they can. Buyers typically want to get the best deal possible. If you pay too much for the property, then you have voluntarily given away extra money that rightfully belonged to you. If you are not concerned about this, then may I suggest some local charities that would love a donation!?
The fact is, it is common for buyers to be coming from outside the area and have extra cash to throw at a property they really want. This doesn’t mean the contract price reflects market value, it just means they are willing to pay above market value to get the home they really want. Lenders are not going to loan above market value. This is a reason to know the true value of the property.