After your offer is accepted, two paid evaluations stand between you and closing: the home inspection and the appraisal. Together they typically cost a few hundred dollars each, and both protect you from expensive surprises. As you budget, add these to your total with a closing cost calculator so no fee catches you off guard. Here is what each one costs, what it covers, and what to do when the results are not what you hoped.
What a home inspection costs
A standard home inspection typically costs between $300 and $500 for an average single family home, with larger, older, or more complex properties costing more. You hire and pay the inspector directly, and you should attend the inspection if possible, walking through with the inspector teaches you more about the house in three hours than months of living in it will. The inspector examines the roof, foundation, exterior, plumbing, electrical system, HVAC, attic, and major appliances, then delivers a written report with photos.
- Standard inspection: typically $300, $500, paid out of pocket at the time of service.
- Larger or older homes, multi unit properties, and rural homes with wells or septic systems cost more.
- Specialty add ons, radon testing, termite/pest inspection, mold testing, sewer scope, each typically add $100, $300.
- Some lenders or loan programs require a termite inspection separately, so ask your lender early.
What a home appraisal costs
The appraisal is ordered by your lender (not by you) to confirm the home is worth at least the loan amount. It typically costs $300, $600 for a standard single family home, paid by you, usually upfront or at closing. The appraiser is an independent licensed professional who compares the home to recent sales of similar properties nearby. You do not choose the appraiser; regulations require the lender to order it through an independent process to keep the valuation unbiased.
Inspection vs appraisal: what each one is for
Buyers often confuse the two, but they answer different questions. The inspection answers “Is this house in good condition?”. It is entirely for your benefit. The appraisal answers “Is this house worth the price?”. It protects the lender’s collateral. The inspection report belongs to you and is private; the appraisal goes to your lender and directly affects whether your loan is approved at the agreed price.
- Inspection: you hire the inspector; findings are yours to act on through negotiation or walking away.
- Appraisal: the lender orders it; a low value can reduce your approved loan amount.
- Neither is optional in practice for a financed purchase, and skipping the inspection is risky even when paying cash.
What to do if the inspection finds problems
No inspection comes back perfect, every home has a list of minor issues. Focus on the big ticket items: roof, foundation, electrical panel, plumbing, HVAC, and water intrusion. With your agent, you have three main options: ask the seller to make repairs before closing, negotiate a price reduction or closing cost credit so you can fix the issues yourself, or walk away under your inspection contingency and get your earnest money back. Get contractor quotes for anything major before negotiating, so your ask is grounded in real numbers.
What to do if the appraisal comes in low
A low appraisal means the lender will only finance based on the appraised value, not your offer price, the gap comes out of your pocket. Your options: pay the difference in cash, ask the seller to lower the price to the appraised value, split the difference, or challenge the appraisal with better comparable sales (a “reconsideration of value”). If none of these work, the appraisal contingency lets you cancel the contract and recover your earnest money. This is why the contingency matters: without it, you could lose your deposit or be forced to overpay.
Who pays for what: a quick breakdown
- Buyer pays: home inspection, appraisal fee, and any specialty tests you order.
- Usually the buyer, sometimes negotiated: termite inspection and survey, depending on local custom.
- Seller may cover: repairs agreed during inspection negotiations, or credits toward your closing costs.
- Timing: inspection fees are due at the time of service; appraisal fees are usually collected upfront by the lender or rolled into closing costs.
How to keep these costs under control
You cannot skip these evaluations, but you can avoid paying twice. Schedule the inspection promptly after the offer is accepted so you have time to negotiate. Do not order specialty tests (radon, mold, sewer scope) blindly, ask the inspector which ones the home’s age, location, and visible conditions actually warrant. And if the deal falls through, remember that inspection reports are generally not transferable to a new property, so each new offer means a new inspection fee. Budget for that possibility if you are shopping in a competitive market.
A worked example: one purchase, every dollar accounted for
Follow a single hypothetical purchase to see how these costs behave in practice. A buyer agrees $425,000 for a house, plans 20% down, $85,000, and a loan of $340,000. Before closing, three evaluation bills arrive. The inspection itself costs $425. The home is old enough that the inspector recommends two of the specialty checks covered above: a radon test at $175 and a sewer scope at $275. The inspection side therefore totals $425 + $175 + $275 = $875, paid out of pocket as the work is done. The lender ordered appraisal costs $450. All in, the evaluations cost $875 + $450 = $1,325 money worth remembering in the total budget, which is why folding it into a closing cost calculator alongside the other fees, and sanity checking the whole purchase against a house affordability calculator, beats discovering it line by line.
Then the appraisal lands at $410,000, $15,000 under the agreed price. It is tempting to assume the buyer must simply find $15,000, but the lending maths is subtler. The lender lends 80% of the appraised value, not of the price: 80% of $410,000 is $328,000, so the loan shrinks by $340,000 − $328,000 = $12,000, not the full gap. If the price stayed at $425,000, the buyer’s cash would rise to $425,000 − $328,000 = $97,000. That same $12,000 extra. In the event, the two sides split the problem: the seller concedes $7,500 and the price becomes $417,500. The buyer’s cash is now $417,500 − $328,000 = $89,500, which is $4,500 more than the $85,000 originally planned. Seller gave $7,500, buyer found $4,500, and the $12,000 loan gap is exactly covered, the negotiation worked because both sides were arguing from the appraiser’s number rather than from pride. Modeling the revised loan takes a minute with a mortgage calculator, and it is worth doing before agreeing to any split, so the monthly payment on the smaller loan is a known quantity rather than a closing day surprise.
Inspection and appraisal compared
| Question | Home inspection | Home appraisal |
|---|---|---|
| What does it answer? | Is this house in good condition? | Is this house worth the price for lending purposes? |
| Who chooses the professional? | You do, hire an inspector whose reports you can read | The lender does, through an independent ordering process |
| Who is it protecting? | You, the buyer | The lender’s collateral, with a useful signal for you as a side effect |
| Typical cost | $300, $500, more with specialty add ons | $300, $600 for a standard single family home |
| When is it paid? | At the time of service, out of pocket | Upfront to the lender, or collected within closing costs |
| What does a bad result trigger? | Repair requests, a price or credit negotiation, or walking away under the inspection contingency | A cash gap, a price renegotiation, a reconsideration of value, or walking away under the appraisal contingency |
| Who sees the result? | You, the report is your private property | The lender, and you receive a copy under lending rules |
Common mistakes to avoid
- Waiving the inspection to win a bidding war, with no backup plan. If competition forces the waiver, at least bring an experienced eye to viewings and budget a repair reserve. Winning the house and discovering the roof in month two is the expensive version of losing the bid.
- Ordering every specialty test on the menu. Radon, mold, sewer scope, and termite checks each answer a specific worry. Order the ones the home’s age, region, and visible condition actually raise, the inspector will tell you which those are, and skip the rest.
- Skipping the inspection walk through. The report alone is a list; the walk through is an education. Three hours beside the inspector teaches you where the shutoffs are, what will need money first, and which findings are routine, none of which survives translation into a PDF nearly as well.
- Treating the appraisal as a verdict on what the home is “really” worth. It is one licensed opinion built from comparable sales, prepared for a lending decision. Markets regularly pay more or less than appraisals in both directions; use it as a negotiation anchor, not as an insult or a guarantee.
- Letting contingency deadlines drift. Both protections expire on dates written into your contract. An inspection you schedule late, or an appraisal gap you negotiate slowly, can leave you choosing between losing the deposit and accepting terms you hate.
- Assuming the fees come back if the deal dies. They do not, the work was done. Budget the $1,000, $1,500 or so of evaluation costs as the price of information on any serious offer, including one you may walk away from precisely because the information was bad.
Seen whole, the pattern is reassuring: a four figure spend, made early and in the right order, is what stands between a buyer and the five figure surprises, a failed roof, a fantasy price. That these two evaluations exist to catch.
Frequently asked questions
How much does a home inspection cost?
Typically $300, $500 for a standard single family home. Larger homes, older homes, and specialty add ons like radon, mold, or sewer scope testing raise the price. You pay the inspector directly at the time of service.
How much does a home appraisal cost?
Typically $300, $600 for a standard home, paid by the buyer. The lender orders the appraisal through an independent process, and the fee is usually collected upfront or included in your closing costs.
Can I skip the home inspection to save money?
You can, but it is one of the riskiest ways to save a few hundred dollars. An inspection regularly uncovers problems, faulty wiring, roof damage, plumbing leaks. That cost thousands to fix. Waiving it is especially dangerous for first time buyers who have no experience spotting these issues.
What happens if the appraisal is lower than the purchase price?
The lender will base the loan on the appraised value, leaving a gap you must cover in cash, negotiate away (seller lowers the price), split with the seller, or challenge with better comparable sales. If your contract has an appraisal contingency, you can cancel and recover your earnest money.
Do I get to choose the appraiser?
No. Federal rules require the lender to order the appraisal independently so the valuation stays unbiased. You can, however, supply the appraiser with information about upgrades and comparable sales through your agent, appraisers generally welcome factual input.
Are inspection and appraisal fees refundable if the deal falls through?
Generally no. These are services already performed, so the fees are sunk costs even if you walk away. That is exactly why inspection and appraisal contingencies exist: they protect your much larger earnest money deposit, even though the evaluation fees themselves are not recoverable.