The agreed upon sale price for the home is $172,800 and you asked for a seller's concession of $4,800 which inflated the sale price to $177,600. The house appraised at $176,000 therefore you would be responsible for anything over and above the appraisal. If there were no seller concession the house would have appraised.
Remember, the seller was accomodating you by adding $4,800 to the final sale price to assist with additional monies you needed. So yes, you should make up the difference... more