How much does a home appraisal cost?
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If you’ve ever applied for a mortgage or home equity loan, bought or sold a home, refinanced a home, or sold assets after a disaster or divorce, chances are you’re already familiar with home appraisals.
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Home appraisals are reports made by professional appraisers to determine the value of a property. It’s easy to think of these as just opinion-based estimates, but there’s a separate process involved and key considerations that every home appraisal should address.
No matter the size or type of property, whether you’re an experienced trader or a first-time buyer or seller, it’s important to understand what home appraisals entail and how much they cost.
What is a home appraisal?
An appraisal is done by a professional to determine the value of your home before putting it on the market. As Forbes noted, a lender will ask for one, but the buyer must pay the cost, which varies depending on who makes it.
Types of home appraisals
According to The Balance, home appraisals are required for all home loans and are supported by the federal government through the Department of Veterans Affairs (VA) or the Federal Housing Administration (FHA). But there are private companies that do less expensive home appraisals. There will be a difference in cost depending on who you have your home appraised with, whether through conventional banking or a private company.
Why do I need a home appraisal?
Appraisals benefit the buyer, the seller and the lender. It’s true that a house is worth what someone is willing to spend, but an accurate value of a property is necessary because, as a seller, you don’t want to underestimate your price and get ripped off, and , as a buyer, you don’t want to pay too much for something that isn’t worth its selling price.
However, as HomeGuide pointed out, the main importance of the home appraisal is to establish the terms of a mortgage. They are needed before you can get approved for a loan, and they give a good estimate of how much to lend a loan seeker.
How do home appraisals work?
An appraiser will normally start with a comparable selling approach, looking at other homes in the area using recent sales, proximity and similarity as guides. According to Money Crashers, a house on the same block will give a better indication of value “than one six blocks away.”
But there are many other factors an appraiser will use to value a home, including square footage, number of bedrooms, condition, lot size, light and views, building quality, and more. landscaping, fireplaces, pools or finished basement features, light fixtures and character.
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Home Appraisal vs Home Inspection
While a home appraisal focuses on a home’s value relative to the neighborhood, home size, comparable square footage, and renovations added to the home, home inspections delve into the nuts and bolts. bolts of the house to determine the condition of the foundation and the structure of the walls and the potential. warning signs (like mold). Both are recommended, if not required, by lenders.
How much does a home appraisal cost?
Unless you’re looking out your kitchen window and seeing movie stars or professional athletes, you should expect to pay between $300 and $450 for a home appraisal. But this cost can increase depending on several factors.
An appraiser will examine both the property and the surrounding neighborhood to make their assessment of value. Mobile or manufactured homes may cost you less to appraise, while a larger house or lot with many upgrades in a rural area with no comparable homes may cost you more. As noted by Forbes, a multi-family home could cost you up to $600 to appraise, and an upscale home in an affluent location could drive the home’s appraisal up to $800.
HomeGuide has broken down appraisal costs by type of sale and lender. Through a bank, an appraisal should cost the consensus price of $300-450, but a private appraisal (often used to assess value before listing, primarily for estate sales and divorce settlements) would cost around $250-425.
Mobile home appraisals cost around $300 to $425 ($450 to $775 if a VA lender), $300 to $425 for a condo appraisal ($450 to $725 for a VA appraisal), $400 to $500 $ for a multi-family home appraisal ($550 to $850 for a VA appraisal) and $350 to $500 for a property appraisal.
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Appraisals are usually included with other closing costs and are normally scheduled by the lender. But that doesn’t mean you shouldn’t do your research and ask questions. Lenders will go with home appraisers who are cheap and familiar. You are buying or selling one of the greatest assets of your life – understanding the home appraisal process and knowing what it will cost is fundamental to selling or buying a home.
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