About Home Appraisal Fee
When you are buying or selling your house, how do you know the exact value of your home?
There are online sites where you can get an idea about what the property could be worth (AVM).
However, these might not be accurate as there are a lot of factors not included in calculating the property values in AVMs.
The best way to know the actual value of the property is through an appraisal. However, getting an appraisal conducted is going to cost you.
In this post, we will understand what the home appraisal fee is in detail.
Before learning about appraisal fees we will understand what home appraisals are.
What Is Home Appraisal?
An appraisal is the valuation of the subject property which is conducted by a licensed appraiser.
Whether you are an investor or a first-time homebuyer, you need a home appraisal to get approved for a mortgage.
The lender will hire an appraiser to comment and value the property that you are going to buy to make sure the value of the property matches the values of the properties in the market or what the seller is asking for so that the lender can lend you the money to purchase that property.
Some of the factors that the appraiser considers during an appraisal are the condition of the home, size, landscaping, number of bedrooms, bathrooms, number of fireplaces, swimming pools, above /below the ground basement, countertops, lighting fixtures, electrical, and HVAC system, etc.
After the appraiser takes a look at everything in the subject property, they go out and look at other properties in the neighborhood with similar features as your property.
These properties are called comparables. After looking at the comparables in the neighborhood of similar properties, the appraiser will come up with a value of your property.
What Is Home Appraisal Fee?
A home appraisal fee is a charge incurred by the buyer or the homeowner when they are buying or refinancing their property to get the more accurate property value for the lender to lend the money.
As a buyer, you would have to pay the home appraisal fee and this is shown in your estimate by your lender which usually is paid outside of your loan.
How Much Is The Appraisal Cost?
On a typical transaction, a house appraisal cost could be anywhere between $300 to $450.
However, some appraisal management companies might charge higher. The mortgage appraisal fee also depends on the type of home you are planning to buy like if it’s a condo, multi-family home, single-family home.
The home appraisal cost can also be based on the square footage of the property in question.
The location of the home can also affect the appraisal fee depending on how far the certified appraiser has to travel.
The time and mileage can be factored into the distance they have to drive to go to appraise the home and to the nearest comparables.
If there are not enough comparables in your area, and if the appraiser needs to travel more to find a few comparables, that might add up to your appraisal cost.
Similarly, if your property is in a rural area where there are no appraisers available, the cost of getting one to get your property appraised could be on the higher side.
The appraisal fee can also be depending on the type of mortgage you are planning to get.
FHA loans require more specific safety things which include additional safety inspections which could result in higher appraisal costs.
How To Avoid Paying For An Appraisal Fee?
If you are buying a new home, the lender would require an appraisal and you won’t be able to avoid it.
If you are refinancing your mortgage, there is a possibility that you might be able to avoid paying the appraisal fee.
This is called a Property Inspection Waiver (PIW). In this, the lender’s automated system will determine the value of your home automatically through some complex calculations.
If the automated system determines that the property value submitted in the application is considered according to the current market and some other factors, then you might get approval for PIW.
However, this completely depends on the automated system whether or not your refinance will get PIW.
Conclusion
An appraisal is one of the significant processes during a home buying process. And the appraisal fee could range anywhere between $300 to $600 depending on the factors discussed.
In case the property value comes in less than the sales prices, the buyer can renegotiate and get the price lowered and the seller can either lower the price or request for another appraisal.
The appraisal helps the buyer to understand that the price of the home is fair according to the current market.
The seller of the home understands what the actual worth of his home is. And the lender has proof that the property would be priced at a value where in case of default and foreclosure, the lender can get the money that they provided as a mortgage.
https://www.compareclosing.com/blog/what-is-home-appraisal-fee/
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