How Much Does a Home Appraisal Cost?

A home appraisal is a standard part of the homebuying process. Your lender needs to know the home’s value and current condition before they can approve the loan.

Why? Two reasons: They need to ensure that they aren’t lending you more money than the home is worth, and they need to verify that it meets your loan program’s guidelines.

Although your lender will order the appraisal, you’re the one who pays for it. How much does a home appraisal cost? Specifics vary based on where you live, but expect to pay about $500 for an appraisal.

How much does a home appraisal cost?

“Appraisal costs vary from market to market across the US, but normally the charge is around $550,” says Lori Martin, a loan officer with Fairway Independent Mortgage Corporation (which owns Home.com) in Rehoboth, Del.

Home appraisals may cost less in smaller or less competitive markets. But you should plan for at least $500.

Heather K. McFadden, a broker of record at Morganelli Properties in Hellertown, Pa., said residential appraisals typically cost from $500 to $600 in southeastern Pennsylvania.

Appraisal costs can be higher in areas where demand for houses is high and appraisal orders are urgent.

Other factors can affect home appraisal costs as well, including how far the appraiser has to travel to the property. 

“Location of the property, complexity of the appraisal, and the desired timeline to receive the appraisal report are the most common factors contributing to cost variance,” says Joe Pessolano, a branch sales manager with Fairway in Garner, N.C.

For example, an appraisal for a large waterfront home with few comparable sales in the area could cost well over $1,000.

Another element is whether it is a multifamily property. A fourplex is likely to be a more complex case than a detached, single-family home with no other structures or major issues on the grounds.

Extra time or consideration may be required depending on the type of loan you’re using to buy the home. FHA and VA loans, for instance, have strict property requirements set by the government. If you plan to use one of these loans to purchase the property, your lender will need to hire an appraiser who is certified in those standards.

Martin adds that there some homebuyers may owe an appraisal management charge of $120 as well.     

Factors that affect home appraisal cost:

• Location
• Complexity
• Timeline (rush fees)
• Demand in the local market
• Loan program requirements

With demand for houses so high right now, appraisers are often inundated with requests. In addition to visiting the property in person, they must also compile an appraisal report that includes similar properties that have sold in the area (known as “comps”).

All of this takes time, and when homebuyers need appraisal reports urgently, appraisers may charge a premium for the faster turnaround.

Who pays the home appraisal cost?

Typically, the homebuyer pays the home appraisal cost as part of their closing costs. You do not hand over cash or a check to the appraiser – in fact, you probably won’t even meet them. The current homeowner may be present for the appraisal, but the homebuyer usually is not.

The appraisal is a standard closing cost which will be included in your “cash to close” amount, meaning the total funds to close your loan. Your cash to close includes your down payment and closing costs, and your appraisal fee is part of that.

It’s not always the case that the homebuyer pays for the appraisal. Some lenders offer appraisal credits, meaning that they will cover the home appraisal cost on the homebuyer’s behalf.

If you use gift funds toward your closing costs, or you qualify for closing cost assistance, then you could use that money to cover your appraisal fee.

Related reading: Down Payment Assistance: 50-State Guide To Homebuying Programs (With Map)

What is a home appraisal?

During a home appraisal, a certified appraiser will assess the property and verify that it is sound and habitable. They’ll look at the overall condition of the home, and will note if there are any potential hazards such as deteriorating structural elements or signs of mold.

Note, however, that an appraisal is no replacement for a home inspection. More on that below.

The appraiser will also note any value-added features, such as newly remodeled rooms, granite or luxury countertops, stainless steel and energy-efficient appliances, and other elements that would positively affect the home’s market value.

The appraiser also studies comparable properties that have sold in the area, along with details about the local community.

They will determine the value of the home, based on several data points, including:

• Condition of the property
• Square footage
• Recent renovations
• Recent sales of similar homes
• How the property will be used
• Proximity to highways, grocery stores, and other amenities

The appraiser will send the appraisal report to your lender, whose underwriting team will review it to make sure that the appraised value of the home is equal to or greater than your home purchase price.

What happens if the appraisal comes in low?

If the home’s appraisal value is less than the agreed-upon sale price, your lender will not approve the loan for more than the home is worth.

You can then negotiate with the seller if they are willing to reduce the purchase price. Or, you can pay the difference in cash. If neither of these is an option, you can walk away from the sale and look for another home.

Related reading: A Low Appraisal in a Hot Market Can Be a Deal-killer. Here’s How To Salvage Your Purchase

Appraisals vs inspections

Home appraisals are different from home inspections. Appraisals are required and ordered by your mortgage lender after you go under contract on a home. The inspection is not required – but you shouldn’t skip it.

For one thing, the appraisal is primarily for your lender’s benefit. Yes, it helps you to know the home’s property value so you don’t owe more than it’s worth.

But the appraiser isn’t going to look into every nook and cranny, inspecting the plumbing, HVAC, and electrical. They’re not going to inspect the insulation, flooring, and windows, or search the house for signs of water damage.

The home inspector is hired by you to find out everything they can about the house so you can decide whether you really want to buy it.

The inspection fee will likely be similar to the cost of an appraisal – roughly $500. However, they, too, increase with complexity. If you want a pest inspection or a specialized inspection to make sure all the wiring in the house is up to code, you may pay several hundred dollars more.

Learn more: Home Inspection Checklist: What to Look for When Buying a House

One of the costs of buying a home

There are a lot of costs that add up throughout the homebuying process, and the appraisal fee is one of them. But it’s a worthwhile expense, because you do not want a mortgage loan for more than the value of your home.

That would be a waste of money, and it puts you in a bad position if you want to sell the house. Selling for less than what you owe means you’ll have to make up the difference in cash to pay off the mortgage – something no one wants to have to do.

The home appraisal cost becomes well worth it when you realize it could save you from an expensive homebuying mistake.

Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be Fairway is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency.