This only happens in the movies right???? Nope this happened, although names and location have been changed to protect privacy. Why did Bill want that home so bad? Because, it was next door to his elderly parents. Bill didn't care what it was listed for or what it was going to appraise for. He had to have that house.
Now what happened to the sellers. Well, their contract was assigned (not all contracts have assignment clauses) and they sold to Jim for the exact same terms they had agreed upon with Buyer A. Buyer A, they made $20k just for getting there first!
The purpose of this story is to demonstrate how value is truly determined and it's not by an appraiser or online AVM (automated valuation model). FYI, currently Oklahoma does not have a built in assignment clause in the state contract. Although, many states and private contracts do. If in doubt have an attorney review yours.