When Appraisals Fall Short
Often times when a buyer enters into an agreement to purchase real estate a mortgage needs to be obtained by that buyer in order to purchase the subject property. It's a typical part of the mortgage approval process for an appraisal to be conducted prior to finalizing a sale so that the lender can be assured that the subject property meets the value required by the terms of the mortgage. In a competitive real estate market buyers may agree to a price that does not match what an independent appraiser deems to be a Fair Market Value. If the Fair Market Value of the subject property is determined to be less than the agreed upon purchase price this is what's commonly called a Short Appraisal.
If a Short Appraisal issue arises during the course of your transaction a lot of different things could occur (not all of them good). If you're buying real estate in a competitive market you'll want to consult your agent and determine what course is best for you given the circumstances.