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Depends on how bad you want it, but basically they've called your bluff...so you walk away. Tell them to contact you if they're prepared to negotiate. If they need to sell, and there is no other interest above your offer, they'll probably get back to you. I think if you go back with a...

If you are prepared to walk away, put an expiry date/time on the offer. Or try going backwards. Offer $279k, with an expiry. Have to be prepared to walk away though.