A professional home appraisal is essential when buying or selling a home. If you’re buying, your lender will require one to verify that the loan you’re applying for is appropriate to the home’s value. If you’re selling, you’ll want an objective take on how much you can expect your home to sell for. Either way, you’ll be asking the question, How much does a home appraisal cost?
Key Takeaways:
- A home appraisal is a professional estimate of how much your home could sell for on the open market.
- Many factors affect how much you’ll pay for a home appraisal, including the size of the home and property, its condition, and what type of home it is.
- If your lender won’t waive the appraisal fee, shop around to save money on this service.
What Is a Home Appraisal?
A home appraisal is an estimate of a property’s current market value. An independent and licensed appraiser examines the home and its features, compares it to similar homes that recently sold in the same area, and issues their findings in an appraisal report.
The appraiser will consider the property’s location, condition, overall quality of construction, conformity to the neighborhood, size, and age.
Why do I need a home appraisal?
Mortgage lenders require a home appraisal to make sure you aren’t borrowing more money than a property is worth. If your lender had to foreclose on your mortgage, it would be unable to recoup its losses if it loaned you more than the home could sell for.
A home appraisal also may be needed if you want to contest your property taxes, which in many states are determined by fair market values. If your home’s value seems too high on your property tax bill, an appraisal for a lower amount can help you contest it.
Home appraisal vs. home inspection
It’s important not to confuse the home appraisal and the home inspection — they are not the same. The goal of a home appraisal is to determine the fair market value of a home. A home inspection examines and details the condition of a property to alert the buyer to any safety issues or needed repairs. While lenders require a home appraisal, a home inspection usually is optional.
The Cost of a Home Appraisal
The cost of a home appraisal usually is at least $300 and could cost as much as $2,000.
Factors affecting the cost include the home’s size, condition, and whether it’s a single-family house, condo, or townhouse.
Which state you’re in also affects the price. A homeowner or buyer in Alabama might pay as little as $250 for an appraisal, while one in Wisconsin can pay as much as $800.
Who Pays For the Home Appraisal?
Typically, the buyer pays for the appraisal. Sellers pay the fee only if they order their own appraisal, such as for price-setting purposes.
How to pay for the appraisal
The buyer pays the home appraisal cost to their lender as part of their closing costs. If you are hiring your own appraiser — say you want to contest your property tax assessment — you’ll pay the appraiser directly.
How To Save Money on a Home Appraisal?
To pay less for a home appraisal, try these tips:
- If your lender allows you to choose the appraiser, you can save money by shopping around and comparing fees.
- Ask your lender if they have a preferred appraiser. “This might earn you a discounted rate,” says Ryan Meeks, a Realtor with eXp Realty in Gilbert, Arizona.
- Ask your lender for an appraisal waiver. Your lender may not require an appraisal if one was performed within the past year or if you’re making a large down payment.
- Order and schedule the appraisal as quickly as possible to avoid having to pay a rush fee.
- If you’re selling, prepare your property for the appraisal. “This means making necessary repairs, decluttering, and presenting the home in its best light,” Meeks says. “A well-maintained property can potentially result in a higher appraisal value, which could offset the cost of the appraisal fee.”
FAQ: How Much Does a Home Appraisal Cost?
Here are answers to common questions about home appraisal costs.
An on-site appraisal likely will take 30 to 90 minutes, says Ken Folven, chief appraiser and senior director of quality assurance for Clear Capital, based in Reno, Nevada. The size of your home, the number of structures on the property, and other factors may affect how long the inspection will take.
If the appraisal report comes back lower than the offer, you have a few options. You can try to renegotiate the price with the seller, you can pay the difference between your loan amount and the purchase price out of pocket, you can ask for a second appraisal, you can challenge the appraisal, or you can back out of the deal if you have an appraisal contingency.
Yes. You will be responsible for paying the full appraisal fee whether or not you close on the sale.
The Bottom Line on How Much Does a Home Appraisal Cost?
A professional appraisal is an important and often required step when buying a home or getting mortgage approval. And it’s not cheap. Ask your lender if the appraisal can be waived or if you can shop around for a less expensive appraiser.
