If you are the buyer, you can have an appraisal contingency in the contract that allows the buyer to get out if it comes in below contract price. In general, if you are buying a home through a short sale, I would recommend you not spend money until the transaction has been approved by the bank.
If you are the seller, the banks will do an appraisal, but you will likely not see the result. A good way to get a sense of the value is through a Competitive Market Analysis that your real estate agent can do- this basically looks at other properties that have sold recently and gives you a sense for what a property may be worth. A good bet is to talk with a couple different agents to get a sense of what your neighborhood is doing, price-wise.
I am always happy to help people navigate either side of a sales process. Fell free to give me a call or drop a line!