While they may sound similar and happen around the same time, they serve two very different purposes. One protects your wallet, the other protects your well-being. Skip either, and you could be walking into a financial or physical mess.

Let’s break down what each one does, why they matter, and how to make sure you’re covered from every angle.

What Is an Appraisal?

An appraisal is an unbiased estimate of what a property is worth in today’s market.
It’s required by your lender to make sure the home you’re buying isn’t overpriced compared to other recent sales in the area.

What it includes:

• Comparable home sales (aka “comps”)
• Current market conditions
• Property size, location, and features
• Quality and condition of the home

Why it matters:

• Your loan is based on the appraised value—not the sales price.
• If the appraisal comes in low, you may need to renegotiate or pay the difference.
• It helps lenders avoid over-lending on overhyped properties.

Note: You don’t get to choose the appraiser, lenders order it through a third party.

What Is a Home Inspection?

A home inspection is a deep dive into the physical condition of the home.
It’s usually optional (but highly recommended) and paid for by the buyer. Unlike the appraisal, it has nothing to do with value—it’s all about safety, structure, and functionality.

What it includes:

• Roof, foundation, and plumbing
• HVAC and electrical systems
• Appliances and water heaters
• Mold, pests, leaks, and more

Why it matters:

• Uncovers costly problems before you commit
• Helps you negotiate repairs or credits
• Gives you peace of mind about what you’re really buying

Think of it this way: the appraisal tells you what the home is worth. The inspection tells you what it’s hiding.

How They Work Together

Both reports serve as protection, just for different parts of the deal.

Appraisal	Inspection
Required by lender	Optional, but smart
Focuses on market value	Focuses on physical condition
Affects your loan approval	Affects your decision to buy
Can trigger renegotiation if low	Can trigger repairs, credits, or exit from deal

Getting both gives you a full-picture view of the property and the power to make an informed decision.

What Happens If You Skip One?

Skip the inspection? You risk buying a home with expensive hidden repairs.
Skip the appraisal? Your loan won’t be approved—and you could end up overpaying.

Neither is worth the risk.
In competitive markets like Los Angeles, some buyers are tempted to waive these protections to get their offer accepted. That might win the deal—but it can also lead to serious regret.

What If Issues Come Up?

If the appraisal comes in low, you can:

• Renegotiate the price
• Pay the difference out-of-pocket
• Dispute the value with supporting comps

If the inspection reveals problems, you can:

• Ask for repairs
• Request a credit or price reduction
• Walk away, depending on your contract

This is where working with a knowledgeable broker and real estate agent makes all the difference.

Don’t Skip What Protects You

Buying a home is one of the biggest investments you’ll ever make.
An appraisal protects your money.
An inspection protects your future.

You deserve both.

Have questions about how these work or what to expect in your loan process? Let’s chat. I’ve helped hundreds of buyers navigate these exact steps, whether you’re buying your first home, refinancing, or figuring out what’s next as a self-employed borrower.