To answer the question, market value (as stated by an appraiser) and sales value are not always the same. The seller can choose to take less for the home and give the amount between the sales price and the market value for the borrower to use toward closing costs and pre-paids (taxes & insurance) in an amount up to 3% for conventional loans and up to 6% for FHA loans If the seller wants more than the market value, then the borrower would have to pay the difference between market value and and sales price since the lender will only let you borrower a percentage for whatever the market value is (as determined by the appraiser). LTV is 95% for conventional and 96.5% for FHA. For example, if the borrower has a house that is valued at 100,000 and they want to charge 105,000, then the borrower would not only have to come up with their downpayment, but would also have to tack on an extra $5000 to what they put down in order to buy the home. Please call me if you have any questions 972-854-3270.