Did I offer too much?! What should I do?

[Jared Cornelison]

I made an offer $12K below asking price for a vacation condo in Hawaii and have it under contract. Everything has been going smoothly with the process until I just saw that the appraisal came back BELOW our purchase price! by -$32K!

 I haven't heard yet whether that will keep my bank from funding the loan or not but doesn't that mean I am paying way too much for it? 

What should I do? 

[John Underwood]

Definately use this as a bargaining tool to get the price reduced. Do you have a standard contingency clause that says house must appraise for sell price? If so make the arguement that the house is only worth what the appraisal says and the bank will only loan on that much and then sit back and listen. Wait for them to offer less don't say anything until they reply.