The simple answer to this frequently asked question is YES. You can charge what you want as long as the buyer agrees and the buyer can get the loan. The appraisal only has to do with getting the loan. As they say, “a home is worth whatever a buyer is willing to pay for it.” Remember, this does not mean the home will sell for the asking price.
There are also reasons why the seller cannot or will not sell below a certain price. Sellers who have not owned their home for long enough or purchased at the height of the market may not be able to pay off their own loan on the property and their own closing costs without bring cash to closing. Sellers are not always in a position to do that and consequently may not always be in a position to pay buyer closing costs.
It usually happens when there are few comparable homes that have sold in the past six-to-twelve months in the vicinity of about a two mile radius of the home. Sometimes the home is unique and has features that have few comparables so it is hard for an appraiser to make an adjustment that can justify the sales contract purchase price. It can also happen if the market gets flooded with new home buyers. The competition can quickly drive the market up considerably past what like homes were selling for a few months earlier.
Usually with good negotiations the seller can come down some and you can come up some. However, most buyers would have to terminate the contract because their lender would only base their loan amount on the appraised value of the property and they would have to come up with the difference between appraised value and sales price from their own funds. This would be in addition to the lender required down payment percentage of the appraised value and closing costs.
That is why it is so important to work with a realtor because they will make sure and put contingencies in the contract that allow you to either rescind the contract and get all your earnest money back or to renegotiate the price when this happens.