Appraisal value 9% lower than asking

[Kunal Lakhwani]

I am under contract for a single family in Indianapolis with a turnkey provider. The property just finished rehab after which the lender ordered an appraisal which came back about 9% lower than the seller is asking. I also ordered an independent inspection which found multiple issues like electrical wiring, water damage in basement, broken dual pane window (fogging), cracks in garage floor any much more. The seller agrees to fix most of the concerns in the inspection report, and agrees to meet in the middle of the asking price and appraised value.

I am concerned as some of the issues reported in the inspection like ones I listed above are not what I would expect to be in a brand new rehab. Also, the 9% difference in the appraised value seems significant. Should I pull the plug? Or agreeing to meet in the middle if the issues are addressed is justified?