Do I need both a home inspection and an appraisal?

Yes. Lenders require an appraisal to approve your mortgage, but the appraisal does not check for defects. A home inspection protects you from buying a house with structural issues, faulty wiring, or a failing roof. Skipping the inspection to save $400–$600 can cost you $10,000+ in surprise repairs.

How much does a home inspection cost vs an appraisal?

A home inspection costs $300–$600 depending on home size and location. An appraisal costs $500–$700 for a single-family home. Combined, expect to pay $800–$1,300 — a small fraction of your total closing costs.

Can a low appraisal kill my home purchase?

Yes. If the appraisal comes in below the purchase price, the lender will only loan based on the appraised value. You must either renegotiate the price, bring extra cash to make up the difference, or walk away. A low inspection, by contrast, gives you leverage to ask for repairs or a price reduction — it doesn't stop the loan directly.

Home Inspection vs Appraisal: What's the Difference?

First-time buyers often confuse home inspections and appraisals because both involve a professional walking through the house with a clipboard. But they serve completely different purposes: the inspection protects you, the appraisal protects the bank. You need both. Here's the breakdown.

Home Inspection: What It Is

A home inspector examines the property's physical condition — roof, foundation, HVAC, electrical, plumbing, insulation, windows, doors, and visible structural elements. They produce a detailed report with photos, notes, and estimated repair costs.

Home Inspection Quick Facts

Who orders it?	You (the buyer)
Who pays?	You
Cost:	$300–$600
Can you negotiate?	Yes — ask seller to fix or credit
Required by law?	No (but foolish to skip)
Timing:	After offer accepted, before close

Appraisal: What It Is

An appraiser determines the market value of the property by comparing it to recent sales of similar homes (comps). The lender requires this to ensure the home is worth the loan amount — if you default, they need to recover their money.

Appraisal Quick Facts

Who orders it?	The lender
Who pays?	You (via closing costs)
Cost:	$500–$700
Can you negotiate?	No — appraiser is independent
Required by law?	Yes (all conventional, FHA, VA loans)
Checks defects?	Minimal — cosmetic only

Key Differences at a Glance

Question	Inspection	Appraisal
Is the roof leaking?	✅ Yes	❌ No
Is the price fair?	❌ No	✅ Yes
Is wiring up to code?	✅ Yes	❌ No
Can I use it to lower price?	✅ Yes	⚠️ Only if low
Will it stop the loan?	❌ No	✅ If too low

Real-World Example

You offer $350,000 on a house listed at $340,000 in a competitive market.

Inspection finds: 15-year-old roof with 2–3 years of life left, water stains in the basement, and an HVAC unit past its expected lifespan. Repair estimate: $18,000.
Appraisal finds: Comps support $345,000, so the house is slightly overpriced. Result: Lender will only loan 80% of $345,000 ($276,000) — you need $74,000 down instead of $70,000.

With the inspection report, you ask the seller for $10,000 in credits for the roof and HVAC. With the low appraisal, you renegotiate the price to $345,000. Together, they save you $15,000+ and reveal a major defect you'd otherwise discover after moving in.

Should You Ever Skip the Inspection?

In hot markets, some buyers waive inspections to make their offer more competitive. Here's the risk: the average major defect found in a home inspection costs $6,500–$15,000 to fix (roof replacement, foundation crack, electrical panel upgrade). An inspection costs $400–$600. The math is clear.

If you must waive to compete, at minimum get a pre-offer walkthrough with a contractor or knowledgable friend, and budget $10,000–$15,000 for surprise repairs in your first year.

Understanding your full monthly costs — including potential repairs — starts with knowing what you can afford. Use our mortgage calculator to factor taxes, insurance, and maintenance into your budget.

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Texas buyers face a median home price of $305,000 with a 1.60% effective property tax rate. See how these numbers affect your payment with our Texas mortgage calculator.