How Much Does A Mortgage Appraisal Cost

What Do Appraisers Look For

The goal of an appraisal is to determine the fair market value of the property. To achieve this, appraisers tend to inspect specific areas or features that impact the propertys price. These include

• Health and safety hazards
• The structural integrity of the home
• The condition of the home
• Upgrades or improvements

• The general condition of the home
• Permanent upgrades or improvements

One thing to keep in mind is that appraisers only focus on immovable in their reports. Anything that isnt permanently attached to the building is considered personal property and does not count as part of the home.

Loan programs like Veteran Affairs and Federal Housing Administration come with slightly different appraisal checklists. It would be best to ask your lender for more information about your desired loan program appraisal checklist.

Appraisal Final Inspection Fee

Final inspections are usually necessary for new builds and remodels. After building a new home, the buyer or seller pays a final inspection fee of $150 to $175 to ensure that all work has been completed and is up to code. In situations where renovations are done with a reinspection to include completed projects in the house value portion, a buyer or seller may pay a reinspection fee of $150 to $175.

Why Do I Need An Appraisal

If youre buying a house with a mortgage, your lender or the laws governing mortgages require an appraisal. All FHA loans require an appraisal. There are a few other reasons you may need one.

• Determining what to sell your home for.
• Making sure youre not overpaying for a property.
• Determining gift value to a relative.
• Determining estate values.

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Home Appraisals: What To Expect And Who Pays The Cost

• 4 min. read time

Waiting to find out the results of a home appraisal can be stressful for homeowners and buyers alike. As a homeowner, you might need your home to appraise at a specific value before you decide to sell or refinance. As a first-time homebuyer, the appraisal could impact whether or not you qualify for a mortgage. The truth is, home appraisals can have a significant impact on your mortgage, the final terms of your refinance, or even negotiations between a buyer and seller.

In short, a home appraisal determines the fair market value for a home. A licensed home appraiser evaluates the home as a neutral third party by researching similar neighborhood homes. After assessing the home, the appraiser submits a detailed report.

Sounds easy enough, depending on the outcome. But if a home appraisal reports a much higher or lower value than anticipated, it can cause added stress for everyone. For example, the buyer and seller could restart negotiations, a buyer could walk away, or the loan could fall through.

The good news is that the home appraisal process can be less stressful when you know what to expect.

What Do Home Appraisal Fees Cover

Typically, a home appraisal fee covers:

• The expertise of the appraiser, who has been licensed, trained, and insured in the profession
• The appraisers visual onsite inspection of the home, which can take anywhere from 30 minutes to a few hours and involve taking measurements and photos
• The appraisers analysis of recent comparable sales
• The appraisal report, summarizing how the appraiser arrived at an independent opinion of value

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Review Comparables Before You Put The Offer In

The bank appraisers and your realtor are going to be looking at the same comparable sales, and your realtor should be providing you comparables PRIOR to writing an offer to make sure that what youre paying is justified. If you know the facts & have sales to support your offered price then youll know that youve made an informed decision and havent overpaid in the first place.

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What Home Sellers Need To Know About Appraisals

As a seller, a low appraisal, if accurate, means you may have to lower your homes price to get it sold. Holding out for an all-cash buyer who doesn’t require an appraisal as a condition of completing the transaction is unlikely to net you a higher sales price. No one wants to overpay for a home.

Unfortunately, if your surrounding area has experienced recent distressed sales, that can lower your home’s appraisal value. If you feel that your homes value has been dragged down by the sale price of nearby foreclosures and short sales, you may be able to convince the appraiser that your home is worth more if its in significantly better condition than those properties.

Getting an appraisal is also a required step when giving a home to a family member as a gift of equity.

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Mortgage Life Critical Illness Disability Or Job Loss Insurance

Unexpected health or employment changes can affect your income and your ability to afford your home. So, consider applying for insurance when you set up your mortgage. There are several options that can help protect you and your family’s financial future if youre diagnosed with a critical illness, pass away, lose your job or become unable to work due to a disability.

What Does A Home Appraisal Cost

Home appraisals typically cost between $300 and $450. The home’s location, size, and condition factor into the cost. Appraisers should work on a flat fee or hourly basis. If the appraiser expects to be paid a percentage of the home’s value, it can signal an unethical practice, which should be avoided.

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Home Appraisal Cost Factors

The cost of your home appraisal may be affected by factors like:

• Size of the house: A larger home will take your appraiser longer to evaluate.
• Local cost of living: An appraisal will cost more in an expensive city than in a smaller town.
• Damage to the house: A damaged home takes more effort to determine the fair value.
• Lack of nearby comparable homes: Appraisers compare your house to similar nearby homes to form a baseline for their estimate. If there are no comparable houses, it’ll take more time to evaluate.

How Do You Find A Professional To Appraise Your Home

If you are working with a lender or insurance company, chances are that they will be able to recommend someone they trust and work with regularly to appraise your home. However, if you still need help finding an appraiser and/or will be needing to hire an appraiser by yourself, or want to know what to look for, there are some things you should be keeping in mind. You will want to hire a professional who is licensed or certified in your area, who is ideally a member of a professional association of home appraisers and regularly participates in professional development for real estate appraisers.

If you are unsure or want to see further proof of their qualifications, you can ask to see their license or certification documents before hiring them. You can also search websites such as AngiesList.com, Google or use directories for professional home appraisers. The following are a few suggestions for professional associations of appraisers, which have online directories for real estate appraisal professionals, where you can learn more about how appraisal works, and find professionals in your area.

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Why You Can Trust Bankrate

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. Weve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.

Bankrate follows a strict editorial policy, so you can trust that were putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.

Our mortgage reporters and editors focus on the points consumers care about most the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more so you can feel confident when you make decisions as a homebuyer and a homeowner.

What Is The Cost Of A Home Appraisal

Appraisal fees vary by state, but appraisers must charge customary and reasonable fees for the area. Expect to pay the lender $300 to $500 for an appraisal of a standard single-family home.

More complex properties are more expensive because the inspection takes more time, says Erin Benton, vice president of Decorum Valuation Services, an appraisal management company in Ellicott City, Md.

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Home Inspection Vs Home Appraisal

Home inspectors will test an evaluate the structural integrity of a home, as well as testing mechanical systems , appliances, and health issues such as mold. An appraisal focuses on the neighborhood, size of the home, any home improvements, and sales from comparable homes. As a buyer, it is usually required by the lender to get both.

How A Home Appraisal Works And How Much It Costs

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When you apply for a home loan, a lender will usually require an appraisal of the property, whether you’re buying a house or refinancing a mortgage.

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What Is A Home Appraiser Looking For When They Are Assessing A Homes Value

An appraiser is looking at and assessing the value of your home and property, without your personal effects. Appraisers do not care about custom furniture or other things that are yours that you might be taking with you or have no impact on a homes value. They are considering things such as the quality and workmanship that built your home, your homes bones. They are considering the interior and exterior condition that your home is in, your homes size, how many rooms, how updated is it, how functional is it, any amenities, and the size of the lot your lot is on. They are also looking at the sale prices for comparable homes in your neighbourhood and area. They will be making notes and recording information about this.

When considering your homes fair market value, this number is influenced by recent sales of similar properties and current market trends, i.e. if homes are being sold for more than asking price, etc. An appraiser is considering your homes amenities such as the number of bedrooms and bathrooms, square footage or square meters, and how functional a homes floor plan is. An appraiser will do a complete visual inspection of the homes exterior and interior, making any notes of anything that might decrease a propertys value such as anything that needs to be repaired.

Comparative Market Analysis :

Real estate agents use a CMA to value a home, considering factors like nearby home values, ratings for school districts, and the homes general condition for their analysis. CMAs provide a reasonable estimate for a homes value when setting a listing price. While this report is more likely used as a tool for sellers rather than buyers, you can always ask your real estate agent for a CMA if youre looking to buy. Its important to note that lenders do not consider a CMA as a valid appraisal to determine loan value.

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How Much Is An Appraisal Fee When Buying A House In Arizona

If you are buying a home with mortgage, your lender will require a home appraisal. A professional real estate appraisers job is to give an unbiased OPINION of value of the subject property. Typically, your lenders will order the appraisals to make sure the propertys value is worth more than youre borrowing. It is also to protect home buyer from paying more than what is worth in current market conditions.

While the lender hires the appraiser, the buyer usually is the one who pays for the service, although some buyers may negotiate and get the seller to pay.

Contents

What Does The Home Appraisal Include

Many appraisers use Freddie Macs Uniform Residential Appraisal Report as a template for their work, regardless of whether Freddie is involved in the relevant mortgage. Want to see the scope of a typical report? You can download the six-page document as a PDF using that link to Freddies website.

The form includes :

• Property details
• Plot dimensions, shape and view
• Buildings general description and foundations
• Interior and exterior characteristics, materials and condition
• Types and numbers of rooms
• Amenities and appliances
• Description of general condition, including obviously needed repairs
• Breakdown of how subject home compares with three comps
• The appraised value

It really is a comprehensive report.

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Who Pays For An Appraisal

Most commonly, the homebuyer pays for the appraisal.

As mentioned above, the mortgage lender appoints an appraiser and you pay the fee within your closing costs. One good thing: you normally get a copy of the report. So, if the appraised value comes in under the sale price or identifies issues, you have some serious ammunition to help you renegotiate the deal.

What Do Home Appraisers Look For

Appraisals are not performed by your mortgage company. Most state laws require that only an independent third party may perform a property appraisal, though your mortgage lender may help schedule or arrange the appraisal.

During the actual inspection, an appraiser looks at a number of factors in the home to determine its value. Some of the things that appraisers consider when they determine a homes value include:

After the appraiser finishes their research, they make a final valuation of the property in a formal report. The appraiser then delivers the report to your mortgage lender.

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What Does A Home Appraisal Include

As a seller, you want to know the value of your home to make certain you get top dollar when you put it on the market. As a buyer, you want to make certain the house you are buying is worth the same or more than what you are paying. This type of process clarifies both of these situations. In addition, the lender usually requires a house appraisal to ascertain that the house is worth the asking price.

Buying And Selling A House

Buyers and sellers may opt to have a private appraisal which could be a traditional full house or a newer option, such as a desktop, hybrid, or drive-by. These are often independent of a mortgage evaluation. A seller may wish to have one to properly value their home for sale, while buyers may want a preliminary inspection to see if the price is in line before they apply for financing.

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Can You Get A Free Home Appraisal

If youre curious to find out how much your home is worth, an online tool like HomeLights Home Value Estimator can be a good starting point.

Our home value algorithm pairs your answers to a few questions about your home with public data and recent sales records for other properties in the same neighborhood. From there, we provide you with a free home value estimate in less than two minutes.

This can be useful if youre planning a remodel or would find a ballpark value estimate useful. However, online estimates are not replacements for appraisals and wont be accepted by a lender as an opinion of value.

Another option to consider is requesting a comparative market analysis from a local real estate agent, especially if you have any plans to sell your house soon. Agents use CMAs to price homes for the market, often using a similar method as appraisers. Agents will usually provide you with a CMA free of charge, though again this method of value wont constitute an official appraisal.

Property Size And Complexity

Appraisals will generally cost more for unusual, complex or large properties, which sometimes require additional visits to the sites or extra research to determine value. A luxury waterfront house in a remote area will take more time to evaluate than a starter home in a tract subdivision, for example.

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Appraisal Fees By Property Type

Appraisal fees to assess the sales value of your home varies depending on the size and features of your home, along with prices appraisers charge in your area. It can also change depending on the type of appraisal you need. Hawaii has the highest appraisal costs ranging from $600 for a single-family, condo, or manufactured home) to $1,200 for a 24 multi-family unit.

Appraisal Fees By Home Type

• Mobile Home Appraisal The cost for a manufactured home appraisal is $300$425, while the VA charges $450$775.
• Land Appraisal Cost The cost of an appraisal for less than one acre of land is between $350$500, at an average of $425.
• Condo Appraisal Cost The appraisal cost for a condo is similar to that of a house, costing $300$425, while the VA charges $450$725.
• Multi-Family Appraisal Cost A multi-family appraisalof a duplex, triplex, or fourplexwill cost about $400$500, while the VA charges $550$850.
• Estate Appraisal Cost An estate appraisal includes all property of worth with the sales value of the home. Its usually carried out after a death or divorce to divide an estate equitably and to assess the estate tax due and costs approximately $350 to $475.
• Commercial Appraisal Cost A commercial appraisal for farms or businesses includes measurements, calculations, photos, maps, and all legal documents. The average cost of a commercial appraisal is $3,100, with property owners paying between $1,500 and $4,800, or about $110 per hour.