Now - they can take another offer from a conventional or all cash buyer but they should disclose to the new buyer you backed out because of appraisal.
I would demand they come down in price because their lender with their appraiser did not see the value. But (again) if you loaded that house with upgrades that is a whole other story and chapter.
Bottom line is you should always use a Realtor when buying new constructions to handle these things for you.
If not, you need to review your purchase contract when is the time to remove all the loan contingency. Usually it may be a chance to lose your deposit if you didn't close loan after you sign to remove all loan contingency. Other case is your seller is a very nice person.
I wonder which one you are buying. I have registered many buyers at all the builders in Dublin. Standard Pacific told me that they have never had any appraisal issues especially if a buyer goes through their lender, but they said that even with the buyers own lenders, they had no issues yet. I guess there is always a first time.
The prices in each release have been going up $25-$35K which is almost every 2-3 weeks so the appraisers are having a hard time keeping up with this fast a pace.
Make sure you read the contract or ask them about the appraisal contingency. If there is no appraisal contingency then I am sure there is a loan contingency that you could hold on to and back out, especially if you don't have the additional $10K to make up the difference.
Did you take an agent with you to register at the new homes? If you did, please talk to your agent and see if they can advice you. It is always a good idea to have an agent when going to buy a new home from a builder. It does not cost you anything and your agent will get paid from the builder. You can get a lot of valuable information from your agent. The sales people are working for the builder and they are not looking out for your best interest.
Hope this helps.
You may want to have an attorney review your contract and your options in this event.
Here is more information about appraisal contingencies:
Best of luck!
The 680 Group at Alain Pinel Realtors