How Much Does a Home Appraisal Cost?
How Much Does a Home Appraisal Cost?
After so much searching, the time comes when you finally find the house you want to buy, and an appraisal accompanies this to obtain the final approval of your mortgage.
If you are not an experienced buyer, you must be wondering what an appraisal is? Who should pay it? How much does it cost?. In addition to these questions, you should find out about the different types of home appraisals and what factors can change a home appraisal price. So…
What is a home appraisal?
It is a prerequisite for most mortgages, no matter where you live. Through it, the value of a home will be determined and allow lenders to generate a report. The report is what will determine the appropriate amount that can be loaned to the buyer. Professionals certified by the state carry out the appraisals. In this way, inflated appraisals that may harm or benefit some of the parties are avoided.
Who chooses the home appraiser?
The buyer chooses the appraiser, and it is normal for the lender to provide you with a list of trusted and high-integrity appraisers based on their track record. The cost of the appraisal will be paid by the buyer and will appear as one more fee within the closing costs. However, the lender is obliged to inform you of the appraisal cost when beginning the prequalification process so that he knows exactly what to expect and does not encounter surprises.
How much does a home appraisal cost?
A typical home appraisal can range from $ 200 to $ 450. It will depend on the type of appraisal. There are four types of appraisals:
1) Uniform Residential Appraisal Report (URAR)
It is the most common appraisal out there, and lenders require a URAR before approving your mortgage.
To perform a URAR, an appraiser carefully reviews both the interior and exterior of the home. The process takes two to four hours and costs between $ 300 and $ 400. In the end, the appraiser will give you a detailed report that breaks down the value of your home. This is the most extensive type of home appraisal and, therefore, the most expensive.
2) Restricted use, short report, or automatic evaluation:
This type of appraisal provides less information than other types, so it is considered insufficient for the approval of a mortgage. The cost is around $ 100 to $ 150. Homeowners and real estate agents often use it to help determine the sale price. To perform this type of home appraisal, an appraiser assesses only the home’s exterior and relies on the owner to provide information about the rest of the property.
3) Comparative Market Analysis (CMA):
Like the previous one, this type of appraisal is not valid for the approval of a mortgage. Sellers are also frequently used to help determine the price of a home. During this appraisal, factors such as the value of nearby homes, school district ratings, and the house’s overall condition are considered for analysis. CMAs provide a reasonable estimate of the value of a home when setting a listing price.
4) Online appraisals:
Today you can find several sites online that offer home appraisals to those who want to know how much their home is worth. Depending on the amount of information requested, they may even be free. Lenders do not accept this type of appraisal as valid.
Factors Affecting the Cost of Home Appraisal
Let’s mention the four most important factors that can affect the cost of your home appraisal.
1) Type of property
An appraisal for a two-bedroom home will be less expensive than one with multiple bedrooms, a finished basement, and an attic. If you plan to set up your home as a rental property to generate income, the appraiser will require a rental survey and income statement, adding to the cost.
2)The value of the house
It goes hand in hand with the type of property: the more significant the house, the more expensive the appraisal. A larger home will take longer to evaluate and will result in a more extensive report.
3)The location of the house
The distance that the appraiser must take to reach the property will influence. These days it is common to account for driving times and mileage, so you should expect to pay more for your home appraisal if the home is located outside of town. Keep this in mind when choosing an appraiser.
4)Type of mortgage you are requesting
Mortgages that involve a federal agency, such as the Federal Housing Administration (FHA), require an appraisal that includes additional security inspections, resulting in a higher cost.
Since an appraisal is a fundamental requirement to get your credit, be sure to ask your lender in advance what to expect for the cost of your home appraisal to be sure to reserve that amount to pay as part of the closing process—the house. Being prepared and knowing what to expect will make you feel more comfortable when buying your new home.
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