What to do when appraisal comes low.?

FSBO (a CA agent outside of CA) overpriced house and had appraisal done, which came in much lower than expected. We made an offer, which was accepted. The appraisal our bank ordered came in the same as the one she did (5% lower than contract price), so we dropped our contract price to the appraised value of the... show more FSBO (a CA agent outside of CA) overpriced house and had appraisal done, which came in much lower than expected. We made an offer, which was accepted. The appraisal our bank ordered came in the same as the one she did (5% lower than contract price), so we dropped our contract price to the appraised value of the house. Seller still didn't agree and ordered a third appraisal. All 3 of the comps on the 3rd appraisal were less than 3 months old vs subject property, which was 4 years old. And the subject house STILL came in higher than all of the comps on a $/sf basis. Can you see any good sound logical reason that we pay the higher appraised value for a house that was appraised on behalf of the seller (IE the bank won't use it)?
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