The average cost for a home appraisal is $350. Hiring an appraiser, you will likely spend between $280 – $550. The price of a home appraisal can vary greatly by region (and even by zip code). View our local appraisers or get free estimates from pros near you.
A home appraisal is a complete study of your home in order to assess how much it is worth in current market conditions. One is usually ordered before buying or selling a home, refinancing a home, or when dividing up or selling off assets after a divorce or loss.
The main features of a home that are taken into account when writing an appraisal are:
As mentioned above, the most common reason for getting a home appraisal is for the sellers to know how much the house is worth so they can set the price for the home, and for the buyers to know so they can make the best offer.
Buying and selling - Many buyers will make an offer based on the amount the appraisal comes in at (contingency loan) so they don’t end up offering more than the house is worth. On top of this, lending institutions will get appraisals for the same reason, as they will own a portion of the home until the mortgage is paid off.
Divorce settlements – Couples will either split the money from the sale of the family home or one will buy out the other’s half, depending on the appraisal value.
Estate sales – When a loved one must move into a retirement or nursing home, the home usually has to be sold off to pay for it. An appraisal will reveal if enough will be made from the sale to cover the cost.
Refinancing – Sometimes homeowners can get a property inspection waiver (PIW) if they are refinancing and the loan amount is low. The appraisal amount might be higher for a refinance than a sale because there is less risk for the lender when the owners obviously want to stay in the home.
An inspection and an appraisal focus on two different goals. The appraisal is focused on finding the property’s sale value, while the home inspection focuses on the condition of the property and its existing and potential problems. As a buyer, it is usually required by the lender to get both.
For example, Cgi Home Inspection & Appraisal Services in New Rochelle, NY, offers “a detailed home inspection report PLUS provide you with an expert opinion of market value using our restricted use General Purpose Appraisal Report” for one price.
A good appraiser will take about two hours to look at the house. The report will include:
Inspection – the house and land must be measured properly.
Comparison – the house will be compared to similar properties within a mile of the home. It’s harder to find comps for larger homes with more unique features, in which case the radius might be extended. Legal Edge Real Estate in Canton, MA, says “All home pricing is based on the last 6 months of current sales. When calculating a market analysis for a home, I use homes that are most similar to the one we are working on to see what the most realistic pricing would be.”
Cost to replace – the appraiser assesses how much it would cost to rebuild the house with its existing features and dimensions.
Income capitalization for investors – when investors ask for an appraisal, they want to know how much money they can make from the building and land, including rental income, land zoning for new construction, and local property taxes. Realtors like Troy Erickson in Chandler, AZ, will know the best appraisers for this, being a real estate investor himself.
Final appraisal report – will be written within 3-10 business days.
It’s not always the buyer’s responsibility to pay for the appraisal. In some markets or areas, the seller will agree to pay it (and/or the buyer’s realtor’s fees) to incentivize buyers. Or the lender will include the cost in the closing fees.
Flat rate for size – check to see if the appraisers you’re looking at offer a flat fee for a certain square footage home.
Multifamily – the cost of an appraisal on a multifamily building will cost more due to the extra kitchens and bathrooms.
FHA appraisals – these are more expensive by about $50 because the report must include a list of loan conditions and repairs.
Complex appraisals – McMansions and other specialty type housing require much longer and more detailed appraisals, which could cost between $1,200 and $1,400.
Multiple buildings on the property – appraisers usually charge an additional $50 per building.
Instant equity - You may find that you have gained instant equity in your home due to rising home values in your area, and you could even refinance the reminder owed on your existing mortgage at a lower rate because you have so much equity.
Second opinion - If you are disappointed in the appraiser’s final number because you are a seller, you can get your own list of comparable homes to make sure he or she is taking all recent sales of homes like yours into account. If the numbers aren’t similar, you can ask the buyers or their lender to consider getting a second opinion from someone more familiar with your local prices.
Before putting it up for sale - Sometimes it’s worth getting an appraisal on your home before you put it up for sale just to know what to fix so you can ask for a higher price. Renovate what’s important. Clean up and possibly landscape the garden. Take before and after pics to show the buyers’ appraiser the added value.
Lenders sometimes look for the cheapest appraisers, which is not good for the buyers or the sellers. Buyers can’t choose the appraiser, but they can request a competent one. If you have any say in the matter, look for the following:
The formal & final report must follow the Code of Professional Appraisal Practice of the Appraisal Institute. “The Appraisal Institute Standards of Professional Practice are composed of:
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