Mortgage education
Appraisal vs Inspection
Both happen after you're under contract. Both cost money. And they answer completely different questions. Skipping either — or confusing what each does — is one of the most expensive mistakes a buyer can make.
An independent, licensed opinion of the home's market value. Ordered by the lender to make sure they aren't lending more than the home is worth.
A licensed home inspector's report on the physical condition of the home — roof, foundation, plumbing, electrical, HVAC, and safety issues.
Side-by-side
| Factor | Appraisal | Inspection |
|---|---|---|
| Who orders it | Lender | Buyer |
| Who it protects | The lender | The buyer |
| What it measures | Market value | Physical condition |
| Typical cost | $500–$800 | $350–$600 |
| Required by lender | Yes | No (but strongly recommended) |
| Can kill the deal | Yes — low appraisal | Yes — via inspection contingency |
Every financed purchase gets one. You can't opt out — the lender orders it and you pay for it at closing or up front.
Every purchase, financed or cash. The one time to consider waiving is a hot market with a pre-inspection done before offer — and even then, most professionals would still get one.
The appraisal tells the bank whether to lend. The inspection tells you whether to buy. You want both.
Common questions
You can renegotiate the price, bring extra cash to close the gap, dispute the appraisal, or walk away using your appraisal contingency.
Yes. During the inspection period you can negotiate repairs, credits, or price reductions — or terminate the contract.
Still have questions?
Talk to RED. Our AI advisor can explain the differences, recommend the best starting point, and help you understand your options — without a credit pull or sales pressure.
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