The appraisal is the fulcrum that the real estate transaction hinges upon. If you are getting a loan then the amount of the loan will not exceed the appraised value. Therefore, if the home does not appraise for purchase price then you are either renegotiating or forced to cancel the contract. The trick with the appraisal is to get your lender to order it as soon as possible. The goal is to get the appraisal back before you spend a lot of money on inspections. The appraisal has to be paid for in advance and usually costs about $450-500. Therefore, depending on the number and cumulative costs of your inspections it is usually less expensive to pay for the appraisal first if you feel like the value will be very close. Conversely, if you are waiving most of your inspections then you may choose to do them first before having your lender order the appraisal. In short choose the option that puts you out of non-refundable costs.

It is important to note that once you have had an appraisal ordered via the loan process you still have to pay for it despite a successful purchase or not.