How Much Does a House Appraisal Cost?

Whether you are buying, selling, refinancing, or getting a home equity loan, you will probably need to get a home appraisal. In some cases, this may seem excessive, but there are valid reasons for them, which can help you understand the home appraisal cost and process.

What Is a Home Appraisal?

A home appraisal is more than an estimate of how much a house is worth; it is an objective estimate of a property’s fair market value. It should also be conducted by a trained and licensed professional. Strict professional ethics and licensing standards bind House appraisers to provide an unbiased, independent estimate of a home’s value.

What Is Fair Market Value in a House Appraisal?

Fair market value is the price a home would likely sell for on the open market. It reflects what similar homes in the area have recently sold for. It also takes into account the home’s condition, features, and location.

Who and What Are House Appraisals For?

A house appraisal can play a key role in a variety of real estate and legal situations. Here is an overview of who uses them and why:

Mortgage Lenders

Mortgage lenders use appraisals to make sure the home is worth the amount being borrowed for it or against it. Because the home acts as collateral for the loan, lending more than the home is worth presents a financial risk for mortgage lenders. In general, they will not approve loans that exceed the equity the homeowner has in the property.

Home Buyers

For buyers, a home appraisal confirms whether the price they are offering on the home is lower than or equal to the home’s fair market value. Buyers can also use the appraised value to negotiate a lower price. When asking “how much does an appraisal cost,” buyers should weigh that against the peace of mind it gives them and the bargaining power it can offer.

Divorce Lawyers and Courts

In a divorce, an appraisal can help establish the value of the house so that assets are divided fairly. If one party plans to buy the other one out of the house, the appraisal serves as a guide for an equitable payout.

Estate Executors

If a will is being probated, the courts may require a home appraisal to determine the overall value of the estate.

On Average, How Much Is a Home Appraisal

The average cost of a home appraisal is $300 to $600 for a standard single-family home in the U.S. However, this can vary quite a bit; the home appraisal cost can be affected by:

• Uniqueness: If the home is unusual in terms of special features, acreage, or historical importance, it can cost more to appraise. House appraisers will need more time for these appraisals, and the lack of comparable properties can make the work more challenging.
• Location: If the home is in a remote location, the appraiser will need to travel to the site, may not be as familiar with the location, and the property may lack suitable comparables, all of which increase the work the house appraisers need to do.
• Complexity: Multi-family properties, rental buildings, and properties with multiple outbuildings often cost more to appraise.
• Rush jobs: If the lender wants an expedited report, this will be more expensive.

Who Pays for the Home Appraisal?

Although the lender is usually the one who orders an appraisal, the buyer ultimately foots the bill. In the case of refinancing, the homeowner pays for the appraisal as part of the closing costs.

In a divorce, the cost of the home appraisal is typically split between both spouses. This is true especially if it’s being done for asset division, and both parties will use the report. However, if only one person requests the appraisal or plans to buy out the other’s share, they may cover the cost themselves.

If the home is part of an estate, the cost of the appraisal will be deducted from the overall value of the estate. That is before the home is sold and the estate is settled.

What Happens After the Appraisal?

Once the appraisal is complete, the buyer gets a report showing:

• The estimated market value of the home.
• Notes on condition, features, and upgrades.
• Comparisons with similar homes recently sold nearby.
• Any issues that may affect value, such as needed repairs or zoning concerns.

If the appraisal comes in at or above the purchase price, everything can proceed as planned. However, if the appraisal is lower than the purchase price, your lender may not approve the full loan amount. If that happens, you may need to renegotiate the price or get additional financing.

Is an Appraisal the Same as a Home Inspection?

A home appraisal is different from a home inspection, although they generally happen around the same time. The key difference is that the house appraisal is for the lender’s information and their approval process. A home inspection is for you as a buyer to find out if there are any major problems with the home.

Both a home appraisal and a home inspection can be used by the buyer in the negotiation process. Both reports can justify a lower sale price, and a home inspection can additionally be used to request repairs before the deal closes.

Can You Dispute an Appraisal?

You can dispute an appraisal if you believe the house appraiser undervalued the home. Your agent can file an appeal, which is also called a reconsideration of value. However, this process can be complex and time-consuming; you would need to provide strong evidence to contest the appraisal, such as better comparables, recent upgrades to the home, or significant errors in the report.

So, how much does an appraisal cost? Most homeowners or buyers can expect to spend $300 to $600, but it can go higher depending on the characteristics and location of the property.

Whether you’re buying, refinancing, going through a divorce, or just interested in your home’s market value, an appraisal is worth the expense and can help you move forward with more confidence.