You've received some terrific feedback from many professionals here. I have a hypothetical question for you to ask and answer for yourself:
Assuming they have priced that house at market value for $1 Million - you want the seller to accept $800,000 - a 20% decrease. Similarly, if you listed your house at market value, would you accept a 20% lower offer along with a contingency from the buyer that they sell their house first in order to buy yours - - - - in this market?
There are always methods to get the home you want, but since you would have to sell first, you should apply the same theory to your sale as to the new purchase to bring it into perspective.
Best of luck and, always use a REALTOR,
Broker & REALTOR
Orange County, CA