Wow, thanks for all the comments! A little more background: We knew we would be paying more for the house than the recent sales, but it is due to (in our mind) the size of the lot and the beautiful landscaping. It’s the type of yard where you feel like you are in a resort. I guess we thought that would be accounted for in the appraisal, especially since many of the recent sales in the area had very small and undeveloped back yards. Another issue is that we are only looking in a small area of a certain neighborhood, and it seems like someone has to die before a house comes on the market! There haven’t been too many sales in the past year in the particular area we like, but of those, many of the sales were estate sales. I am pregnant, so that adds some urgency to our situation. However, I feel like we are back in the the 2006/2007 crazy housing mania, and I don’t want to be paying 50k over the appraised value if the market is going to turn south! Or maybe I am just having cold feet…or pregnancy hormones…