An appraisal is an independent third party that looks at a home and gives a fair market value based on numerous factors about the property. Of course, these are professionals are taking time out of their day to come and look at a house for hours so how much does an appraisal cost? The short answer around $400. At such a high price some people ask are appraisals even necessary to buy a home? Housing wire did a great article about that found here asking the same question. At the end of the day, the appraisal is just another bill on the long list of closings costs.
Why Do I Need An Appraisal To Buy A Home
When a seller is putting his home up for sale they have an asking price which is what the seller believes the home is worth. While this can be accurate sometimes sellers get emotionally attached to the property and have a blind eye to what the real value is. This is where an appraisal comes in an independent party takes a look at the home and its features and using multiple tactics can figure our a fair market value depending on the area.
Also if you plan to get a mortgage for the property the lender is not going to take the sellers word on the value and want a professional for their opinion. It is important to know that the lender will only lend you the lesser of the two. For example, if the seller is asking $235,000 and the appraisal is $220,000 the lender is only going to lend you a max of $220,000 meaning the seller either needs to come down on their price or you need to bring the extra $15,000 out of pocket. Here is some news about appraisals being delayed by some banks so stay on top of your current buying situation.
FAQ About The Appraisal Cost
Who Pays The Appraisal Fee
Nine times out of ten the buyer pays the appraisal fee. While nothing is stopping the seller or lender from paying the cost and you can get credit that can pay off the appraisal cost but majority time the buyer pays.
When Do You Pay The Appraisal Fee
The appraisal fee can be paid on order but most times the fee is lumped into the closing cost. This is to not annoy the buyer since they are a lot of fees and costs when buying a home that troubling them every time a fee is incurred might be annoying.
Who Orders The Appraisal
The lender and the mortgage broker order the appraisal through a licensed and trusted party. Then they will send a licensed agent to the home to find fair market value.
How To Find An Estimate Before an Appraisal
There are a lot of good tools out there giving free home price estimates based on selling prices of homes nearby. Zillow is a popular one but it should be noted that these are not a licensed appraiser and can be wrong. So use them at your own discretion but they are still a great tool if you starting from nothing.
How Much Does an Appraisal Cost In Florida
Since it is an independent third party it is hard to put an exact dollar amount on the cost of an appraisal. Most times each lender has its own apprisal company they want the home to be appraised by. The appraisal usually costs somewhere between $350 -$500. This is for someone to come out and give a look at the property to determine its market value. Note the appraiser is not an inspector and will he might note physical damage he can not say for certain if the damage is putting the property at risk. It can lower the appraisal value of the home to have physical damage.