Why would a seller expect over the valuation as a minimum?

[Lauren Do]

Hi! I am looking for my new primary residence rather than an investment property, although I do have another investment property which was bought without the wealth of knowledge on BP. I am in an ultra-HCOL country. 

I found a house that I liked, a rehab project. It was on the MLS and I viewed it once when it was first listed, but wasn't ready to buy then. Six months later, I viewed it again and put in an offer.

I found comps and called contractors for quotes for repairs. I calculated that the ARV is $450,000 and that the repairs would be $100,000-ish - it doesn't have city water, air conditioning, or working appliances. It has several features which are unsafe as it stands but easy to fix and MUST be fixed for safety reasons.

The house was originally listed at $465,000, then reduced to $435,000 after 4 months on the market. Before they listed, they received a valuation of $400,000 as it stands now without any repairs. 

We made an offer of $315,000, and it was promptly rejected, somewhat rudely, because the owners are expecting the valuation as a 'bare minimum'. They will not look at offers below the valuation, and want above it. 

My question to the wonderful people on the Bigger Pockets forum is why would a seller think that the valuation is a reasonable starting point to move UP from? Why would someone buy a rehab project for above the valuation? The market is not very hot in this particular area due to traffic and it would be considered 'out of town'.  

I would like to understand the seller's perspective on why the valuation is the 'bare minimum'. From my perspective, the valuation is the absolute maximum that one would pay. The sellers are apparently highly motivated to sell, but expect someone to pay more than the house is valued. They have not received any other offers in the 6 months it has been on the market.