This phrase can be used when you're guessing about how something is going to turn out when it's finished:

It looks like the Yankees are going to win this one.

However, it is also used in situations where something has already happened, and you have to tell the bad news to someone:

Sorry, it looks like we had to reject your loan application.

Saying "it looks like" something bad happened is softer-sounding than simply saying that it happened.