Typically there is an FHA and/or VA addendum to most contracts which has a clause or space for putting in the value the property must appraise at (offer price) as a contingency. Read the wording carefully. Here in Florida it states the Buyer is not obligated to buy anything that does not appraise and has the right to walk and receive their deposit back. On a conventional loan, it is one of the financing contingencies. It even goes one step further to say: "Once Buyer provides Commitment to the Seller, the financing contingency is waived and Seller will be entitled to retain the deposit if the transaction does not close by the closing date, unless (1) the property appraises below the purchase price and either the parties cannot agree on a new purchase price, or the Buyer elects not to proceed..." These are standard in the Florida FAR and FAR BAR contracts. You need to check how contracts are written in your state.
I hope this helps.
Broker Associate, GRI, CDM
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty