A home inspection is worth the money because it is the only step in a purchase that examines the house for the buyer. The lender's appraisal estimates value for the lender, and the seller's disclosures only cover what the seller knows. A one-time fee buys a written list of defects, and that list can support a repair request, a price credit or a decision to cancel while the contract still allows it.
Key takeaways
- An inspection is for the buyer; an appraisal is for the lender. HUD's FHA notice says an appraisal does not replace a home inspection and that FHA will not lend or give money for repairs found after closing.
- The inspection only happens if the buyer arranges it, and the contract has to allow time for it. A contingency clause is what makes the results usable.
- A general inspection is a visual survey, not a guarantee. Radon, pests, mold, lead and similar hazards are usually separate tests that you ask about.
- For most pre-1978 homes, federal law gives the buyer a 10-day period for a lead paint inspection or risk assessment unless the buyer waives it or both sides agree in writing to change it.
- Costs vary by home, region and inspector, so get quotes; compare the fee with the repairs the report could surface, not with zero.
Inspection versus appraisal
Who an inspection works for
The CFPB's Your home loan toolkit describes the home inspector as the person who works for you and tells you whether the home is in good condition or a "money pit" of expensive repairs. It advises getting the inspection before you are finally committed to buy.
HUD's notice For Your Protection: Get a Home Inspection (HUD-92564-CN) says an inspection will happen only if you arrange one, and that FHA does not perform home inspections. According to the form, a qualified inspector evaluates the home's physical condition, estimates the remaining useful life of major systems, equipment, structure and finishes, and identifies items that need repair or replacement.
FHA lenders must hand buyers that notice early. Mortgagee Letter 2026-07, dated June 23, 2026, dropped a different disclosure (form HUD-92900-B) from FHA's handbook. It left in place the rule that mortgagees must provide form HUD-92564-CN to prospective homebuyers at first contact, whether for prequalification, pre-approval or initial application.
How the appraisal differs
The two are often confused because both involve someone walking through the house. They answer different questions for different people.
| Question | Home inspection | Appraisal |
|---|---|---|
| Who it is for | The buyer | The lender |
| Who arranges it | The buyer, who hires the inspector | The lender, who orders it as part of the loan |
| What it answers | What condition the home and its major systems are in | What the home is worth compared with recent similar sales |
| Can it replace the other | No | No |
The CFPB toolkit says the appraiser gives the lender an estimate of market value, and that you are entitled to a copy of the appraisal before closing so you can compare your price with similar recent sales. HUD's form adds that an FHA appraisal estimates value for the lender and does not replace a home inspection. It also states that FHA does not guarantee the value or condition of the home, so a buyer who finds problems after closing cannot get FHA money for repairs, and FHA cannot buy the home back.
What a general inspection covers
The HUD notice does not list components. It tells buyers to ask a prospective inspector for their Standards of Practice, the written rules that define what is and is not examined, or for a sample report. That advice is practical: scope is set by the inspector's standards and sometimes by state rules, not by a single national checklist.
Texas is one example of a state that writes these rules down. The Texas Real Estate Commission licenses inspectors, and its standards of practice (22 TAC §535.227) define an inspection as "a limited visual survey and basic performance evaluation" that is not a comprehensive investigation or exploratory probe. Under that rule, inspectors check accessible items and are not required to determine code compliance or report concealed conditions. Separate sections of the rule set minimum requirements for structural systems (foundation, grading and drainage, roof covering, attic, walls, windows, fireplaces, decks), electrical, heating and cooling, plumbing, appliances and optional systems.
Other states set different rules, or none, so a clean report lowers the odds of surprises but does not remove them. Check the limitations section of any report to see which areas the inspector could not reach. To confirm what applies to you, contact your state's licensing authority. The HUD notice suggests asking for references from friends, real estate professionals, local licensing authorities and organizations that qualify and test home inspectors.
Contingency periods and timing
HUD's notice says that if you request an inspection early in the process, you may be able to make the purchase contract contingent on its results. That protection exists only if the contract says so. An inspection with no contingency still tells you about the house, but it may not give you a right to renegotiate or cancel.
That contingency is a term of your own contract. Its length, what you may do when it ends (ask for repairs, ask for a credit, cancel) and how notices must be delivered differ by contract form and state, so the dates and wording in your agreement control. Put the deadline on a calendar the day you sign. Booking the inspector, receiving the report and getting contractor quotes all have to fit inside it, and a missed deadline can leave you without the right to back out or renegotiate on those grounds.
Because specialist tests can take days to return, order them at the same time as the general inspection rather than after reading the report.
Specialist tests to ask about
HUD's notice tells buyers to ask the inspector whether additional health and safety tests make sense for the home, and names mold, air or water quality, asbestos, lead paint, urea formaldehyde insulation and pest infestations as examples. These are usually separate from a general inspection and priced separately.
Radon
The HUD form says the EPA and the Surgeon General recommend that all houses be tested for radon. Whether a radon result can be a condition of the sale depends on the terms of your contract. EPA's health risk of radon page states that radon is the number one cause of lung cancer among non-smokers and that the Surgeon General urged action when a level reaches 4 pCi/L or more. Radon cannot be judged by looking at a house, which is why it is a test rather than part of a visual survey.
Pests and wood-destroying insects
HUD lists pest infestations among the extra checks to raise with the inspector. A wood-destroying insect report, which covers termites and similar pests, is usually performed by a pest professional. The CFPB's sample Closing Disclosure in its toolkit shows a separate line for a pest inspection fee, a reminder that it is billed apart from the home inspection.
For VA loans, the report can be a loan requirement. VA's local requirements page (last updated July 11, 2025) lists states where wood-destroying insect information is required statewide, and eight states where it is required only in listed counties. Elsewhere it is not required unless the VA appraisal notes specific issues. Under VA Circular 26-22-11, veterans may be charged the inspection fee where the Notice of Value requires the inspection, and VA encourages them to negotiate that cost with the seller.
For other loans, ask your lender and agent whether one is needed.
Sewer line
A general inspection sees fixtures and accessible pipes, not the underground line from the house to the street. Some buyers add a separate camera inspection of that line. Whether it is part of your inspector's package is a question for their Standards of Practice and price list.
Lead in homes built before 1978
The EPA's real estate lead disclosure page explains that lead-based paint was banned for homes in 1978. Before a buyer signs a contract for most pre-1978 housing, sellers and agents must provide the "Protect Your Family From Lead In Your Home" pamphlet, disclose known lead-based paint information, share available records and include a Lead Warning Statement.
The rule also requires a 10-day period for the buyer to conduct a paint inspection or risk assessment. The parties may agree in writing to lengthen or shorten that period, and the buyer may waive it. Housing built after 1977, foreclosure sales, zero-bedroom units and some other categories are exempt. A general home inspection is not a lead paint inspection; EPA says buyers who are concerned can hire a certified inspector.
Is the inspection fee worth it?
Inspection prices vary with home size, age, region and what is bundled in, so no single average is reliable. As a reference point only, the CFPB toolkit's sample Closing Disclosure lists a $750 home inspection fee and a $120.50 pest inspection fee. Those are sample entries on a form, not typical prices.
Illustrative example (hypothetical numbers): A buyer pays a $750 inspection fee. The report finds an aging water heater and a leaking roof flashing, and a roofer and plumber quote $4,000 combined. If the seller agrees to a $4,000 credit, the fee equals 18.75% of the credit ($750 ÷ $4,000), and the buyer is $3,250 ahead ($4,000 − $750). If instead the seller refuses and the buyer cancels under the contingency, the buyer has spent $750 to avoid taking on a known $4,000 repair. If the report finds nothing significant, the $750 bought a documented baseline and nothing else.
The same numbers give a simple break-even. With a $750 fee and a $4,000 finding, the inspection pays for itself on average if the chance of a finding that size is above 18.75%, or roughly 1 in 5. A larger possible repair lowers that threshold (a $10,000 finding gives 7.5%), and a cheaper fee lowers it too. The threshold cannot tell you the actual chance for a given house; that depends largely on the home's age and condition. The outcome also depends on the contract, the market and the seller, so treat the arithmetic as a way to frame the decision, not a prediction.
There is no refund when the report is clean, and that is a real cost. The value is in the cases where it is not clean.
Using findings to negotiate
Sort the report into safety items, major systems, and cosmetic or maintenance items. Spend negotiating effort on the first two. Where the report says a defect needs further evaluation, get that evaluation from a licensed specialist before you decide what to ask for.
- Repair request: the seller fixes specific items, and you ask for receipts or documentation afterward.
- Credit or price reduction: you take the home as is, with money toward repairs, supported by a written contractor estimate.
- Extension or specialist test: you ask for more time in writing if a specialist cannot see the home within the contingency period.
- Cancel: available only to the extent your contract's inspection terms allow it, which is why the dates matter.
Estimates that name the exact location and scope of work are easier for a seller to accept than a general request to "fix the electrical." Lenders may have their own repair conditions, so tell your loan officer about any significant findings.
This article is general education, not legal or financial advice; your contract, your state's rules and your lender's requirements decide your options.
Frequently asked questions
Can I skip the inspection if the appraisal comes back fine?
You can, but the appraisal does not tell you the condition of the roof, plumbing or electrical system. HUD's notice states that an appraisal does not replace a home inspection and that FHA will not lend or give money for repairs found after closing.
Does FHA require a home inspection?
FHA does not perform inspections and the inspection happens only if the buyer arranges it. HUD does require lenders to give buyers the HUD-92564-CN notice at first contact, which urges buyers to get one.
Should every home be tested for radon?
HUD's notice says the EPA and the Surgeon General recommend that all houses be tested. EPA's radon page cites the Surgeon General's call to act when levels reach 4 pCi/L or more. Whether you can make the purchase depend on the result is set by your contract.
Can I waive the lead paint inspection period?
Yes, where the rule applies. EPA states that homebuyers may waive the 10-day opportunity, and that the parties can lengthen or shorten it by written agreement. The seller's disclosure duties still apply for most pre-1978 homes.
What does a general inspection cost?
It varies with the size, age and location of the home and what the inspector includes, so ask two or three inspectors for written quotes and compare their Standards of Practice, not only price. The CFPB toolkit's sample figures are illustrations on a sample form, not market averages.
Before you book an inspector
- Find the inspection deadline in your contract, and any separate deadline for radon or other tests, and note the dates.
- Ask each candidate inspector for their Standards of Practice or a sample report, as HUD suggests.
- Ask what is excluded, and whether radon, pest, sewer or other tests are offered or must come from someone else.
- If the home was built before 1978, decide before signing whether to use the 10-day lead inspection period.
- Read the limitations section of the report, and get written quotes for the top items before the contingency ends.
Sources
- HUD, For Your Protection: Get a Home Inspection (HUD-92564-CN, 02/09/2023)
- HUD, Mortgagee Letter 2026-07 (June 23, 2026)
- CFPB, Your home loan toolkit
- EPA, Health Risk of Radon
- EPA, Real Estate Disclosures about Potential Lead Hazards
- VA Home Loans, Local Requirements (updated July 11, 2025)
- VA Circular 26-22-11, Pest Inspection Fees and Repair Costs (June 15, 2022)
- Texas Administrative Code, 22 TAC §535.227, Standards of Practice: General Provisions (Texas Real Estate Commission)
