If you are Buying real estate using a mortgage to finance the purchase, the lender will require an appraisal to establish value. This is typically a Buyer expense but is negotiable with the Seller.  If the property does not appraise for at least the Purchase Price, the Buyer can cancel the contract. The Buyer can also elect to pay more cash to make up the difference between the contract price and the appraised value or ask the seller for a price reduction.