Appraisal HELP!

[Account Closed]

I am a first time buyer, and am half way through my current escrow.  My boyfriend and I are buying a house in Moorpark, CA for $554,000.  The house is in so-so condition, and the appraisal just came back at $528,000.  WHAT DO I DO??  The issue I'm dealing with is that the sellers apparently don't have any money, and the $554K is their break even point with the bank, and 'can't' go lower.  What are my options?  How terrible is it to 'overpay' by $26K?

Any/all help is very appreciated - thank you!!!