When a house doesn't appraise the Seller and the Buyer have several options: Seller reduces price to appraised value, Seller and Buyer split the difference, Buyer pays the difference or Cancels the Sale and Moves on. While emotional involvement is not a good reason to over pay sometimes a particular home meets a unique need of a particular Buyer (ex: Needing to live next to a Family Member) that makes it worth it to the Buyer. Only the Buyer can decide if the home is worth the extra dollars. Its very hard to get the Appraiser to change the value unless the Agent can find errors in the appraisal and can then supply comps that substantiate the higher value.. If you are in a market that is currently moving upward the appraisals can often trail the market. In the end you have to weigh your options if the Seller won't negotiate and go with what is best for you and your situation.