The Process
What is a home appraisal and who pays for it?
Updated Jul 1, 2026
The short answer
A home appraisal is an independent, professional estimate of a property’s market value, ordered by your lender to confirm the home is worth the loan amount. The buyer typically pays for it as part of closing costs. If the appraisal comes in below the purchase price, it can affect your loan, and an appraisal contingency may let you renegotiate or walk away.
Key points
- Protects the lender by confirming collateral value.
- Usually paid by the buyer as a closing cost.
- A low appraisal can change your loan or reopen negotiation.
Appraisal vs. inspection
An appraisal estimates value for the lender; a home inspection assesses condition for you. They serve different purposes and are not interchangeable.
Sources
Every claim above traces to a public government source.
- ViewT1What is a home appraisal?
Consumer Financial Protection Bureau · Government / primary · 2024