All I can say is out of the past 8 properties my clients have bid on, 6 of them had counters that came back with a removal of the appraisal contingency. The seller also will move up the inspection contingency to 10 days knowing full well it is hard, but not impossible, to get an appraisal completed in the 10 days. This prevents the buyer from saying he will remove the appraisal contingency when in reality he has no intention to do so. In most of those same counters, the seller jacks up the good faith deposit to 3% as well.
Yes if the property does not appraise you the buyer must cover the shortfall with cash or back out. If you say you are backing due to the property not appraising when you waived that contingency in the RPA then yes you lose your deposit. If you back out and say you are doing so for other reasons but have not removed those other contingencies yet then you will not lose your deposit.
Hard for appraisers right now because the leg up is so steep that there are not enough reliable comps to justify the new prices. Soon there will be but and we are getting more solds to help them bridge the price gap. In the meantime sellers do this sort of stuff.
As for the property not appraising in the cases I have seen the buyer is covering the shortfall with a higher downpayment.
