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How Much Does A Home Appraisal Cost & What Happens During It?

Jun 21

In other words, it's an expert's opinion of a house's market value. There is an average cost of $300 to $400 for a house evaluation.

When you apply for a home loan, a lender nearly usually requires an appraisal of the property you want to buy or refinance your current mortgage.

 

In order to receive a house appraisal, what exactly is it, and how does one get one?

A qualified or certified appraiser provides a value estimate for a home. Assessors arrive at their estimates by looking at comparable properties that have recently sold nearby, inspecting the property, and forming an opinion.

The mortgage lender requires an appraisal in order to determine the risk of giving a loan. For this reason, the lender wants to make sure that its loan isn't too huge compared with the property's worth in case the borrower fails.

Appraisers often do a thorough inspection of a property, both inside and out, in most circumstances. Because of the coronavirus epidemic, lenders are no longer required appraisers to enter homes for buy and refinancing mortgages. Instead, data gleaned from surveys and other sources, as well as visuals and outside perspectives, may be employed. During COVID-19, you'll have the opportunity to learn more about how to buy and sell a house.

 

An appraisal of a house will cost you, but how much?

Typically, a house assessment costs $300 to $400, with the national average being $339, according to HomeAdvisor.com. House assessment quotes start at $600 in certain urban areas, while bigger or more complex homes might cost up to $1,000.

What aspects of a house's worth are in play?

The following are some of the aspects that have an impact on the price of a home evaluation:

 

The type of loan that is being sought

For government-backed mortgages, an appraiser is necessary. For the purposes of insuring or guaranteeing a loan, these examinations look into the property's basic structural and safety requirements. As a result, an appraisal may cost more when a government-backed loan is involved.

HomeAdvisor estimates that the typical appraisal cost for an FHA or VA loan is $400-$500, compared to $300-$400 for a conventional loan, according to their research.

According to the Department of Veterans Affairs, appraisers can only charge a specified amount for VA loans. The maximum amount that can be charged for an appraisal varies by state and even by county. The maximum VA assessment fees for single-family houses, condominiums, and prefabricated dwellings are $425 to $875. Extra miles and additional time spent appraising challenging properties may be requested by appraisers in order to collect greater compensation.

Fees must be "customary and reasonable" in the region where the property is located rather than being set at a maximum by the Federal Housing Administration for FHA loans.

 

Location

Fees for house appraisals are higher in cities and other places where the cost of living is higher than the national average.

 

The property's size and complexity

Appraisals of unusual, complicated, or large properties might be more expensive since they frequently demand additional site visits or study in order to assess their value. For example, a luxury waterfront house in a distant area will take longer to analyze than a starter home in a tract neighborhood..

 

Who foots the bill for a property appraisal?

To get a mortgage, the lender hires and pays the appraiser, and then the borrower foots the bill.

In other words, the buyer pays for the assessment when buying a house, while the homeowner pays for the evaluation when refinancing a mortgage.

There is no requirement for an evaluation if you pay cash for a home because there is no lender involved. In order to ensure that you don't overpay for the property, you may need an assessment done. In this case, you'd hire an appraiser and foot the bill.


The process of valuing a residence

The majority of government refinancing programs, such as the FHA streamline, the VA interest rate reduction refinance loan, or VA IRRRL, and the USDA streamline loan, do not call for appraisals.

The lender will request an appraisal after you've placed an offer and signed a purchase agreement. A mortgage refinancing application triggers an appraisal request from the lender.

If the lender permits it, you can request to accompany the appraiser on the property's walk-through, according to the Appraisal Institute, a professional group of real estate appraisers.

 

When establishing a home's worth, what factors do appraisers consider?

Appraisers take into account a wide range of elements when estimating the value of a property. For the most part, the appraiser will go to the property and look around. The following are some of the factors they take into account:

  • Inquiry on a property's worth
  • Features that make up a community's identity
  • Real estate market patterns in the area
  • Comparable recent sales in your community to see how much your home is worth
  • A rough estimate of the land and building dimensions
  • Age and design of the house are two factors to consider
  • Materials used in the construction of a structure, both inside and outside
  • This house's state of repair
  • Appliances
  • For instance, there are fireplaces and decks
  • Improvements and renovations to the residence


Home inspection vs. appraisal

There is a difference between an appraisal and a house inspection in the home-buying process.

Having a home inspected by a professional is the primary goal of a home inspection. During the inspection, the inspector looks at everything from the walls to the ceilings to the floors to the windows and doors, as well as the mechanical and electrical systems and appliances. The inspector provides an objective report with repair suggestions following a thorough investigation.

Professionals utilize house appraisals to determine the value of a home. When evaluating the value of a property, the appraiser takes into account a variety of factors, including the current state of the local housing market. It is not the appraiser's job to make repair suggestions.

 

Get a report on the worth of your house

As a mortgage borrower, you are entitled to a free copy of the appraisal report three days before the loan closes. Checking the report for errors is a good practice. Make sure the information is proper.

Contact the lender if you see errors or feel the estimate is wrong. The appraiser may rethink his or her conclusion if you provide any pertinent facts. The lender may seek a second appraisal. If your request is accepted, you will be responsible for the assessment fee.

If the appraised value of the house you want to buy is lower than expected, you might be able to use that information to negotiate a lower price with the seller.