Won bidding war, but appraisal is below offer price, what to do?

The split-the-difference approach is actually the most common resolution in this situation and most reasonable sellers will consider it. You're asking them to come down $7,500 instead of $15,000, which keeps the deal alive without either side absorbing the full hit. Frame it that way to your agent and have them present it as the path of least resistance for everyone. Before going that route, check whether your contract has an appraisal contingency. If it does, you have the right to walk away or renegotiate without losing your deposit. That's your leverage. The seller knows if you walk they have to relist, potentially in a cooler market, and there's no guarantee the next buyer's appraisal comes in any higher. One other option worth knowing: you can challenge the appraisal. If you believe the appraiser missed relevant comps or made errors, your lender can request a reconsideration of value. It doesn't always work but if the market moved fast and the appraiser used older sales it's worth a shot before you start negotiating the gap away out of pocket.

Offer to split the difference 50/50 or to some degree, but keep in mind, there is no guarantee. Before you make the offer, determine if you are willing to accept the property and pay the full difference if the seller says no.