There are definitely more nuances that could be explained here, but in short, the buyer and seller will renegotiate the contract price. Usually, that means the buyer will continue to pay the full contract price and have to cover the “appraisal gap” which is the additional amount over and beyond what the lender will loan due to the appraised value. OR the seller will come down on the price. Both are possibilities depending on the market you are currently in which can have many variables affecting it.