I'm a Ex-real estate agent. You can only get out by going to court now. If the bank has given you finance approval then they have deemed the house worth that value. Plus, no such thing as overvalued property if you have already offered that amount.
As with anything to do with contracts, try to find some clause in there which he has not fulfilled and argue the point. Try to sort it out before getting too close to the settlement date cause if it goes over, you'll get hit with extra penalties too.
Did you place a deposit?
Second option is to call their bluff and tell em you wanna pull out. The other party might not wanna court battle and agree to retract the contract.