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Published: Dec 28, 2023 6 min read

In addition to saving up for a down payment, homebuyers also have to plan for a variety of closing costs due when a sale is finalized, including the appraisal.

While the home appraisal isn’t a massive expense in the grand scheme of things with buying a home, it is almost always required by mortgage lenders, so it’s important to budget for it nonetheless.

Property appraisals are also required for a homeowner to refinance a home, and you should factor in this expense if you’re trying to calculate your overall refi costs.

Appraisal costs can vary depending on several factors including the price of the home, the size of the home and the cost of doing business in your particular housing market. Usually, they cost a few hundred dollars, but in some cases they can total more than $1,000.

This article will guide you through the key things to know about paying for a house appraisal.

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The typical cost of a home appraisal

How much does a home appraisal cost? According to a report from the National Association of Realtors, the typical cost of an appraisal for a single-family home was $500 in 2023.

Costs can vary significantly depending on the market. According to the report, which involved surveying 9,800 appraisers, 7% of respondents said the typical cost for an appraisal in their market is less than $300. On the other extreme, 8% of respondents said the cost is typically $800 or more in their market.

The report notes that 86% of respondents said the typical cost is $400 or more, so you should probably budget at least that much.

Factors that affect the cost of a home appraisal

Appraisal costs vary by location, as previously mentioned, but many other factors can affect how much you’ll pay. Here are the most important ones:

Property size

As a general rule of thumb, the larger the property, the more work it is to appraise. For a big home, it can take an appraiser a few hours to do a full walkthrough to evaluate the condition, take measurements to get the square footage and assess the property’s value. They’re charging for their time, which is why larger homes cost more to appraise.

Value of a home

More expensive homes usually cost more to appraise. Yes, more expensive homes tend to be larger, but that’s not the only reason appraisals for high-value homes cost more.

For one thing, conducting a valuation of a home in relation to “comps” (similar recent sales) can be a more involved process with higher-value homes. Also, expensive homes often have more complicated amenities or architectural details, and reviewing the neighborhood can take more time as well. Lastly, the stakes are higher for appraisals of expensive homes because a lender could try to sue if there are errors, and that may affect the cost the appraiser charges.

Type of loan

Mortgage borrowers who are taking out government-insured loans (VA loans, FHA loans and USDA loans) sometimes pay higher prices than conventional loan borrowers. That’s because the home appraisal process tends to be more involved for government-backed loans.

The rules depend on the particular loan program, and it’s worth noting there are maximum appraisal costs for some government-backed mortgage loans. For example, according to the Department of Veterans Affairs’ fee schedule, allowable appraisal fees top out at between $525 to $1,300 depending on the region.

What exactly is a home appraisal?

The appraiser’s job is to conduct an analysis of the home and the local market to determine the fair market value of your home and produce an appraisal report.

Appraisers consider factors such as the size of the home and the lot, the condition of the home, the quality of the structure, the appliances, the curb appeal, the architecture, the location and the sale prices of other recent transactions in the area.

A home appraisal is the lender’s way of making sure that the home loan amount isn’t more than what the home is worth. In fact, the mortgage underwriter usually wants the home to be worth quite a bit more than the loan amount.

That buffer protects them if home values drop before the borrower has built up home equity through their monthly payments.

In a competitive housing market, it's not uncommon for homes to be priced higher than their appraisal amount.

So, for example, if you have a 10% down payment, but the appraised value of the home is only 90% of the sale price, that means you wouldn't have any equity in the home, even with your cash payment. That would make it difficult to get approved for your loan.

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FAQs about the cost of home appraisals

Can I pick my home appraiser in the mortgage process?

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No, the lender picks a licensed appraiser, and the buyer is responsible for paying for the appraisal.

Separate from the mortgage process, home sellers sometimes hire appraisers to help them set their asking price, but it’s less common. Real estate agents are more likely to advise the buyer on the list price.

Why are appraisals so expensive?

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Whether appraisals are expensive is subjective. Appraising a home can be a lot of work, and you’re also paying for the expertise of a licensed, trained professional. In rural areas, it can also cost a lot of money for the appraiser to travel to and from the home.

Is it worth getting an appraisal?

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Home appraisals are almost always a required step to obtain a mortgage, so even if you don’t think the price is fair, you don’t have much of a choice but to pay for it. On the bright side, the appraisal isn’t just a formality. In addition to being a key part of mortgage qualification, the appraisal can give the buyer peace of mind that they’re not grossly overpaying for the home.

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