The question you should be asking is if $400K is way too high.
In most markets RE prices are in a state of collapse. If $459K
was the bubble price, the an offer in the $300K range should
be more than fair. Since this seller is obviously both a fool
and delusional, you should check into his situation. What are
the terms of his outstanding mortgage? How soon till his
mortgage resets and he can't keep up the payments? His
mortgage is a matter of public record, and these things are
easy to find out. Another approach would be to start out the
conversation by asking if he is willing to begin negotiating
a short sale. That just might shock him back into reality.
Remember, stock prices are back down to 1997 levels.
You should not be buying any real estate above the