A hobbit house described by headlines on Curbed and NBC Bay Area as San Francisco's "smallest house on the smallest lot" when it hit the market last December has sold according to the Chronicle.

What's more: The lucky little people are a couple of SF natives who were technically outbid but won their new digs thanks to the discretion of the owner.

Berkshire Hathaway realtor Heather Stoltz acted as the listing agent for the property at 544 46th Avenue in Sutro Heights, asking price: $599,000. It's a two-bedroom, but you'd be forgiven for calling it a one bedroom with a separate big closet a couple could conceivably sleep in. Of the size she said “I think it is the smallest lot in SF and while there are smaller houses they sit on larger lots.” Indeed the 830-square-foot, two bedroom house sits on just 644 square feet of land, located at the end of a cobblestone path between two larger properties.

The home also serves as a mini-history lesson. It was likely a workshop or small worker's cabin owned like neighboring properties by Adolph Sutro, the silver-mining one-time mayor of San Francisco.

As in the instance of a woman who sold a Mission District property to a buyer who proposed to do the most for the neighborhood, there's a bit of explicit favoritism at play here that will make some smile and others squirm. It went down like this: The seller reportedly received an offer higher than the winning bid, although no offers were made in cash. Even though the eventual buyers couldn't match that highest offer, the owner decided to forgo a bit of profit and let them pay what they could.

"It wasn't a huge difference," Stoltz said, "but it was enough to buy a new car."

Related: Woman Sells Mission Apartment For 2005 Price — With One Catch