I think you are looking at this through the wrong end of the telescope, so to speak. In New Jersey, the standard NJ Association of Realtors contract (and therefore almost any other contract as well) contains a standard clause that says, simply put, no mortgage, no deal. Since the terms of the mortgage that you seek is spelled out, the seller should not be able to insist that you add a cent more to your down payment to make up any appraisal shortfall. Some tricky sellers and their attorneys are attempting to put language in the contract to the effect that you will indeed do this very thing, so it is wise to have your own experienced real estate practicing attorney review the contract document. In New Jersey, you have a three-day attorney review AFTER you sign a contract. The attorney can REJECT the deal and state what would be acceptable, so you would have good protection IF YOU USE AN ATTORNEY. The terms about the down payment and the mortgage amount are just another reason why you should so.