In most cases, yes. There is a standard contingency in most typical contracts that basically says that if the appraisal comes in at less than the offering contract price, the buyer has the right to either (a) negotiate with the seller to reduce the price to the appraisal, or (b) cancel the contract. There are, however, some exceptions.

In a strong seller’s market, sellers may require that any offer waive the appraisal or provide an appraisal gap. For example, in 2019 and 2020, the market was so hot in the Denver market that there were often multiple competing offers on properties (sometimes as many as 20). The listing would often give instructions that offers would be accepted up until a set time and day (e.g., Sunday at 5 p.m.), and the winning offeror would be notified the next day. In order to effectively compete, a potential buyer would have to (a) agree to waive any inspection contingency and (b) agree that if the appraisal came in under the contract price, the buyer would bring the additional money to the closing (and provide evidence that they were capable of doing so). I have submitted as many as 19 offers on behalf of one buyer before we got her under contract. If the buyer was obtaining a mortgage, the lender would, of course, require an appraisal, and would then base the loan on a percentage of the appraisal price - not the contract price. That is why appraisal gap coverage was a fairly standard clause that buyers had to agree to in the offer. In one case, my buyer offered $115,000 OVER the asking price (on a $500,000 sale) and lost to a cash buyer. Cash buyers would simply waive the appraisal entirely.

Appraisals and inspections are vital contingencies to offers to purchase a property, but how they are handled is a direct response to market conditions. I always recommend that buyers engage the support of an experienced buyer agent. Good luck