Appraisals are supposed to work in conjunction with home sellers and assist agents with getting their client’s home sold by attaching a monetary value to the home based on certain criteria. However, since some changes in the appraisal methods and since some appraisers have been involved in shady deals inflating or deflating property values,some changes have affected the property values to the point where it could wreck the deal. If the appraisal on a property does not come at the same price that the buyer and seller agreed to then either the price has to be lowered or raised or the contract has to be cancelled or renegotiated. This causes deals to stop dead in their tracks.
Since the prices used by appraisers go according to the comparables that are currently used and prices have fallen significantly, this makes some prices come in lower than expected. Until the market cycle changes to an upward cycle this may be the case for some time.
If this happens and the buyer had no protection such as a contingency clause they won’t get their intial downpayment back. You can also ask for a second appraisal. Always do a little background work before moving forward for your best protection.