Well, let’s dive right into this. You’ve finally got the financial ducks in a row, and you’re looking to tackle the next big task – buying a home. You’ve got your down payment, but, let me tell you, there’s more to the equation, my friend. That, my friend, is where the nitty-gritty of closing costs, such as the pesty, yet necessary, home appraisal comes in.
Though we wish otherwise, the appraisal fee isn’t something we can conveniently sweep under the rug. It may seem like just a drop in the ocean when compared to the overall cost of buying a home [/how-to-buy-a-house/], but let’s face it – it’s usually unavoidable! Nearly all mortgage lenders [/best-mortgage-lenders/] require it – talk about raining on our parade, right?
Are you pondering refinancing your mortgage? Hassle’s twin sister – the new property appraisal – is waiting in the wings too! Make sure you’re counting this in when you’re putting your ‘refinance expenses’ hats on [/how-much-does-it-cost-to-refinance-mortgage/].
Appraisals are like chameleons; they keep changing based on the home’s value, its square footage, and the local housing market’s mood! Usually, it’s a few hundred dollar dance, but sometimes it spikes up over $1000 – so be prepared!
Fear not, dear reader! By the end of this article, you’ll have mastered the art of budgeting for a home appraisal.
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## TABLE OF CONTENTS
* Typical Home Appraisal Fees
* What Influences Home Appraisal Costs?
* Deconstructing Home Appraisals
* Home Appraisal Cost FAQs
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## TYPICAL HOME APPRAISAL FEES
How much are you going to have to shell out of pocket for this appraisal hoopla? The National Association of Realtors laid out some figures in 2023 [https://www.nar.realtor/research-and-statistics/research-reports/appraisal-survey], averaging a single-family home inspection cost at around $500.
Just like the cost of a cup of joe, appraisal fees vary widely from location to location. Of the 9,800 appraisers surveyed, the pricing was as fickle as the weather – below $300 in some places and over $800 in others.
Oh, here’s the kicker! A whopping 86% of appraisers reported average fees of at least $400. Ah, home sweet home indeed (*eye roll*)!
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## WHAT INFLUENCES HOME APPRAISAL COSTS?
Appraisal prices are like campfire smoke – following the wind and ever-changing. If you think it’s all about your location, well, think again! There’s a whole bunch of other elements tossing their hats in the ring:
### SIZE OF PROPERTY
You’d think more house means more money, right? So a more significant property = bigger appraisal fee. Extensive properties require more elbow grease for a thorough once-over, measurements, and a detailed rundown of overall condition and features. You guessed it – more work for the appraiser, and well, your wallet too!
### HOME VALUE
More expensive homes come with heftier appraisal price tags. Luxury homes come with their baggage – unique features, complex details, or additional research to compare them to their peer group (known as “comps”). Let’s not forget the higher stakes for lenders that notch up the fees too!
### TYPE OF MORTGAGE LOAN
If you’re securing a loan backed by the government, such as those from the VA, FHA, or USDA, chances are you’re looking at higher appraisal fees than your conventional loan counterparts. More comprehensive processes = higher costs!
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## DECONSTRUCTING HOME APPRAISALS
In comes the professional appraiser, their mission: evaluate this colossal property, map out the local real estate market, and come up with the magic number – its fair market value.
The appraiser’s checklist covers everything from home size to structural condition, appliances, architectural style, your curb appeal, and location. Your home is then matched with other recent needle-in-a-haystack similar sales in the area to chalk out the market-based value.
Mortgage lenders are nothing if not thorough; appraisals are their way to ensure the loan amount aligns with the property’s worth. Considering the volatile nature of property values, it provides a bit of a cushion.
But wait, there’s more! You might find yourself in choppy waters if your domicile is pegged at a lower appraisal value. Imagine having a home valued at 90% of the sale price with a down payment, and you’ve put down just 10%! Not an ideal situation for loan approval, huh?
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## FAQS ABOUT HOME APPRAISAL COSTS
### DO BUYERS SELECT THE APPRAISER FOR THEIR LOAN?
No, sir! Responsibility falls on the lender to choose a licensed appraiser. But guess who’s still footing the bill? Yep, you guessed it, the homebuyer!
On the flip side, some sellers might bring in an appraiser to decide an asking price, although, most sellers rely on their real estate agent’s two-cents on this matter.
### WHY ARE APPRAISALS SO PRICY?
Well, expensive is relative. But one thing’s for sure – appraisals have a lot going into them. Time, travel (especially for properties out in the sticks), and the know-how of the appraiser herself all add to the mix.
### ARE HOME APPRAISALS NECESSARY?
Do we have to play by the rules? Almost all lenders require an appraisal before shelling out on a home loan, so we’re pretty much stuck with this fee. But hey, on the plus side, you can sleep easy knowing your hard-earned money isn’t squandered on an overpriced property!
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*Ready to bite the bullet and invest in that dream crib? Comprehending appraisal fees is an essential cog in the wheel of budgeting for a painless real estate transaction or remortgage. This guide has got your back – plan ahead, and keep those closing surprises at bay!*