However, due to the value of the home being lower than expected the seller (or lender in your case) will most likely have to face this obstacle in the future with other buyers too. It is in their best interest to simply accept the appraised value as the new purchase price and close the transaction. They are entitled to re-appraise the property using an acceptable appraiser to get a second opinion as to value.
Most sellers including lenders want to believe the properties they own are worth more than what they are. Reality can be a hard pill to swallow but this may work out in your favor so hang on. You can also agree to split the difference between the purchase price and the appraised value if you really want this home. This would require you to come up with additional cash to pay the difference though.
Anyway, good luck to you. It is not uncommon for these situations to happen. That is why we say "it's never over, til it's over". Best to you.
If what you say is true, your agent is, in my opinion (and I am not a lawyer) in violation of their fuduciary duties, i.e. to negotiate the best possible deal for you. The lender who has produced this "independent appraisal" isn't likely to loan you more money and you will have to bring a larger down payment to the table, or re-negotiate on the appraisal clause, or walk away. Another lender may offer to lend you more money but it will be on the basis of another independent appraisal (and another fee for which you may be responsible) as long as it is at the higher level you originally expected.
Another sceanario could be that the agreed upon time line in your contract has expired and your agent has not informed you of the fact, meaning you are locked in to the agreement and don't realize it, yet. If that is true you should seek an attorney's advice.
If your agent is pressuring you to accept the status quo you need a new agent.
Not knowing the area of San Diego you're purchasing as well as the price level (loan type), it's hard to say, but THESE days, many banks are taking a percentage off of the APPRAISED value when calculating Loan to Value (LTV) to determine whether and how much to finance for the property. Meaning, many lenders are requiring even more down payment then normally required when purchase price used to equal the appraised value. The difference is coming out of your pocket so let me ask you this. Is this house THAT special that you would make up for the difference? Yes, buying a home is hard. Selling a home is even harder so you're in a better position. Good luck to you and I would stand firm. It's your home and your money. Your agent will be long gone after you buy the house, but you'll be living with this decision for a long time. Best of luck!
In your contact i.e. if you are using the CAR Residential Purcahse Agreement, there is an appraisal contingency. If the property did not appraise with the agreed upon price, you can renegotiate or you can just chuck off the deal. The first thing that your agent should tell you are those contingency dates so you are aware when can you get off the deal if you think it is different from your expectations. And I agree with you, you should only pay for what the property is worth. This is one of the most serious problems we had why we are having this debacle and no client should agree to pay for a house more than it's worth.
I believe We, Real Estate Agents, whould make the whole transaction process smoother, not harder. Stick to your principles because by the end of this transaction, your agent will move on while you'll be stuck with regret the fact that you paid more than you should. And please, do not take this experience against ALL agents, because whether you believe it or not, my priority for putting a deal together is what will make my client happy.
All the best,