Balancing out the difference
A major confusion that arises during this process is that is the amount of appraisal paid along with the initial down payment and could be retrieved later if the appraisal gap does not occur after finalizing the deal? The answer to that is No. The buyer has to separately pay the downpayment and keep the cash saved with him for later in case there is found an appraisal gap in the final contract and appraisal.
This might or might not yield a definite and fruitful impact on the overall process of procuring the house since the buyer could never be sure whether the amount of appraisal would have to be used later or not.
Keeping the above aspect in mind, it is always decided to pay the appraisal way after the deal has been struck. It is suggested to pay for it during the final payment or last lease (depending upon the decided payment plan). So that there is no ambiguity as to how much monetary amount is to be paid overall whether inclusive or exclusive of the amount of appraisal.
To avoid any issues in the future, every single point must be discussed in detail by the seller and the buyer or any other involved relevant stakeholders. Every single minor detail has to be decided prior and all the essentials must be included in the written contract. All stakeholders must keep a copy of the contract with themselves. In this way, there would be no scams, frauds, or any other legal issues for anyone involved as well as every party would get a fair deal.