What Is A Home Appraisal, And How Much Does It Cost?

As a general rule, most single-family home appraisals cost $300 – $400, while multifamily units typically cost upward of $600.

Even though most lenders require an appraisal as a condition of a loan closing, the buyer pays for the appraisal unless they negotiate for the seller to pay instead. The amount that a buyer pays for an appraisal depends on a number of factors, including the size of the home, the home’s location and the amount of property research that the appraiser ends up doing before they issue a final value report on the appraised value.

Keep in mind that if the property is on a very large plot of land, the appraisal cost will be more because the appraiser often surveys the boundary lines of the property to make sure that the listed square acreage is correct.

Buyers can also expect to pay a higher appraisal fee in a very rural area simply because there are fewer appraisers working in these areas. This might mean a longer wait for an appraisal as well. If you have any questions about how much your appraisal will cost, consult with your mortgage lender.

Depending on the type of appraisal ordered by your lender, and the laws of the state where you live, an appraisal can take from several weeks to a few days from start to finish. The inspection itself can last from 15 minutes to several hours, although, as noted above, those longer physical inspections have become less common due to the pandemic. It’s a bit too soon to say whether the technology embraced during the pandemic is here to stay, but it seems likely that tech will continue to speed up this leg of the home buying process.

Home appraisals can affect the selling price and mortgage amount for a home. An appraised value that doesn’t match your purchase price could mean trouble. If the house appraises for less than you’ve agreed to pay, you may find yourself having to bring more cash to close or negotiating with the seller to make the deal work. In some cases, a too-low appraisal could force you to walk away from the home. If you’re buying a home, here are some things to keep in mind about your appraisal.

Be Thoughtful About Your Offer

A hot market can force buyers to make offers well above the asking price. In some cases, buyers may end up agreeing to pay much more than the home is actually worth. If you have extra money to bring to the table, this might not be a problem, but if you don’t have extra cash on hand, a low appraisal might mean you can’t get financed. To avoid this scenario, you need to know the market. Keep an eye on comparable sales, and hire a great real estate agent who knows the area well.

Appeal The Appraisal

Do you think the appraiser made an error? You may be able to appeal the decision.

Review the appraisal report to make sure everything checks out. Did they note all the property details correctly? Are the comparable properties cited in the report too far away from the home you’re buying? These may be grounds to appeal the appraisal. To start the appeal process, contact your lender.

Don’t Stress

The appraisal results are out of your hands, so as the buyer, all you can really do is hope things work out the way they’re supposed to. The appraisal is in place to protect you and your lender from overpaying for a home – so a low appraisal could be a blessing in disguise.

When you’re selling your home, it’s important that the home doesn’t appraise for significantly less than what the buyer agreed to pay. Unless you’ve got a cash offer, a low appraisal could be a deal-breaker. Here are some ways to help your home appraise for the right amount.

Provide An Offer List

If you received more than one offer for your home, let your appraiser know. Multiple offers can show the appraiser that your home was priced well. Provide the appraiser with a list showing each offer you received.

Attend The Appraisal

As the seller, you’re allowed to be present when the appraiser does their walkthrough. Accompanying the appraiser gives you the chance to point out any upgrades, improvements or particularly charming design features. This is your chance to make sure the appraiser doesn’t overlook those fantastic new cabinets you just installed.

Tidy Up

You can’t change your home’s square footage or location, but you can make your home look bigger, brighter and more valuable with a few affordable home renovation tricks.

Maximize your space by putting away countertop appliances and clutter. Replace dim light bulbs with brighter ones. Hang mirrors to maximize natural light and give the illusion of a bigger room. Pull furniture away from the wall. Do whatever you can to make your home look bigger and brighter.

Provide Comparable Properties

If you or your agent are aware of recent sales that could be considered in the report, provide them to your appraiser. Search public records for homes with a final sale price close to what you asked for your home. You can present this list to the appraiser when they arrive at the home.

When you’re refinancing, you want to get the highest appraisal value possible. A low appraisal value could keep you from refinancing, but a high appraisal value means more equity for you – which could mean more cash out or better loan terms. Here are some ways to up your chances of a high appraisal value.

Get An Outside Opinion

Your home is full of memories, which may give you blind spots when it comes to defects in your home. Have a friend or family member examine each room in your home and point out areas that can be improved. Sometimes, a new set of eyes is just what you need.

Declutter

A thorough decluttering will help each room look more put-together. While your appraiser shouldn’t assess your home’s value based on how much clutter or mess there is, it’ll be easier for them to see your home favorably if everything’s put away nicely.

List Upgrades And Improvements

Upgrades and improvements can increase your property’s value, but the work you’ve done may not always be obvious. Did you get a new air conditioner? Replace the windows? Add new landscaping? Provide your appraiser with a list of upgrades you’ve made so they can consider these items in their report.

An appraisal determines the fair market value for a home. A professional appraisal is done by a licensed third-party appraiser who assesses the interior and exterior of the property, researches similar homes in the area and gives a final report. Be sure to spruce up your home to make it look more appealing to an appraiser.

Before your mortgage lender gives you a loan, they look at the appraiser’s report to ensure that you aren’t paying more for the home than its current value. Most single-family home appraisals cost $300 – $400, while multifamily units typically cost up to $600, though it could be more costly if you live in a rural area or have large acreage.

If an appraisal comes in low, buyers and sellers both have options. A buyer can renegotiate the sales price, and a seller can lower the home price or request another appraisal. While a client or seller can request a new report, that does not mean that a new report will be ordered or issued upon that request.

Appraisals are beneficial for everyone involved in the home buying process: For buyers, a home appraisal ensures they are paying the current fair market value. For sellers, an appraisal helps them price their home competitively. For mortgage lenders, an appraisal provides proof that a home is valued at the proper level to approve a mortgage.

Ready to apply for a mortgage or a refinance of your current mortgage? Get started with Goldenkeylending® today.