When using a mortgage to finance your home purchase, an appraisal lets you and the lender know that the property is priced appropriately. That way you don’t end up paying more for a home than it is worth, and your lender doesn’t need to make adjustments to the loan amount, since they will only lend as much as the home is worth.
Even though appraisals are ordered by the mortgage lender, the buyer is responsible for paying for the cost of the appraisal — which typically averages around $400. Factors like loan type, location, size and type of home can all affect how much you’ll pay. Before getting an official evaluation, check the property’s estimated value at Zillow to learn more about factors influencing the property’s current value.
How much do appraisals cost?
The average home appraisal costs about $400. Inflation and demand for appraisals has driven costs up recently, especially in New Mexico, Oregon and Washington, which have some of the most expensive appraisal costs in the country. In these three states, appraisals range from $410 to $590.
Generally, you’ll pay less for an appraisal with a conventional loan and more for an appraisal with a government-backed loan, like an FHA, VA or USDA loan. These types of loan appraisals average around $750. This is because government-backed loans typically require additional documentation as part of the appraisal report.
Who pays for a home appraisal?
The buyer is typically responsible for paying for the appraisal at closing. However, it is possible for a buyer to request the seller pay for the appraisal as part of seller concessions. These details can be negotiated during the offer contract period.
What affects the home appraisal cost?
Factors like loan type, property type, location and the complexity of the report required are just a few of the factors that affect home appraisal costs. Here’s a look at how these factors may impact your overall home appraisal costs.
Your type of mortgage
Conventional loans follow a straightforward evaluation process, leading to lower appraisal costs. You’ll pay more for an appraisal on a government-backed loan, since the federal government sets specific requirements in terms of who can perform the appraisal, how quickly they need to be completed and how much they can charge. Here’s a quick overview:
FHA loans: FHA appraisals typically cost slightly more than conventional loans. The FHA does not set a limit on the cost, except to note that fees must be “customary and reasonable” for the location of the property.
VA loans: Appraisals for VA loans cost between $550 and $1,500, with the average price being $732. The VA sets appraisal cost limits regionally and based on the size and type of home.
USDA loans: All appraisals on single-family homes for USDA direct loans cost a flat $750, as of February 3, 2021, according to the United States Department of Agriculture.
The type of home
Appraisal fees are typically higher on manufactured homes and multi-family homes than on single-family homes. Appraisals on condominiums are in line with single-family home costs.
The type of appraisal
The lender determines what type of appraisal is necessary to finalize your loan based on the loan program requirements, your qualifications as the borrower and some market conditions. In most cases, lenders require a traditional full appraisal. There are a few instances, like when refinancing, that a lender may not require a traditional full appraisal. These other types of appraisals typically cost less.
Desktop appraisal: An appraiser uses publicly available data but does not visit the home in person. Costs as little as $75 to $200.
Drive-by appraisal: Includes a visual assessment without entering the home. Costs $100 to $150.
Hybrid home appraisal: One appraiser does the visual inspection and another analyzes the data collected. Costs between $250 and $375.
Location of the home
Location matters for two reasons. First, costs vary based on how far appraisers have to travel. Appraisers in rural states may charge more because of how far they have to travel. Second, in high-demand real estate markets, like California, appraisers may charge more because the need for appraisals is higher.
Availability of comparable homes
One of the ways appraisers determine the valuation of a home is by sourcing comparables, which look at recently sold homes in the area. In a rural area, where comps are limited or when a home has unique characteristics, it can be more challenging to complete the appraisal, which can drive up home appraisal costs.
Condition of the home
Appraisals on well-maintained homes are often faster to complete, which can keep costs lower. It can be harder to find adequate comparables on older or poorly maintained properties, so home appraisal costs may be higher.
Square footage and lot size
Larger homes, large lots and multi-family properties often have higher appraisal costs because they can be more time consuming to appraise. If you’re having a vacant lot appraised, costs can vary significantly, based on accessibility to the lot, amenities, topography and environmental factors.
Market conditions
When the real estate market is hot and there’s a high demand for appraisals, costs can also increase.