How much is a home appraisal?
The cost of a home appraisal can vary depending on the size and condition of the property. Typically, appraisals cost between $300 and $450, though they can run upwards of $600 or more in some areas. Larger or more complex properties can cost as much as $1,000.
Traditionally, the buyer is responsible for the appraisal fee. A benefit of this arrangement is that the appraisal can ensure the home’s sale price is fair and accurate.
How long does a home appraisal take?
Depending on the appraiser’s availability, a home appraisal can take as little as one to two weeks. But in a particularly busy real estate market, appraisers can get booked up, meaning it could take four weeks or longer to complete the appraisal process.
What do residential appraisers look for?
When an appraiser evaluates a home, they seek to answer the following questions while examining the property:
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Appraisers must first determine that the home is safe and in livable condition, free from health hazards and safety violations, and accessible in terms of utilities like electricity, plumbing, and heat.
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Appraisers look for things like the home’s square footage, the number of bedrooms and bathrooms, and the size of the lot or parcel. Many other factors including condition and quality of construction are considered in determining the properties value.
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If the home contains an attic, garage, or basement, the condition of these storage spaces can likewise add to or subtract from the home’s value.
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Of course, a working heat source is a strict requirement to make a home habitable. A functioning air conditioning system can add value to the property. Appraisers will also look at the type of heating and cooling source and the condition of the system itself.
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Features like fireplaces, swimming pools, hardwood floors, granite countertops, or upgraded fixtures add value to the home
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Damage to the structure of the home or its fixtures can reduce its value significantly, depending on the type and extent of the damage. If damage is severe, the seller may be asked to complete repairs before they can sell the home.
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Exterior features can add value to the home. For instance, a spacious yard or established garden can draw in interested buyers, while eye-catching exterior detailing can add curb appeal to fetch a higher price on the market.
What hurts a home appraisal?
Given the previously mentioned factors, certain issues can hurt your home appraisal, causing appraisers to value the home at a lower value. Such issues include:
- Structural damage
- Neighborhood or geographic location
- Proximity to ear or eyesores, such as factories or airports
- Limited closet space
- Low square footage/few bedrooms or bathrooms
- Date of construction
- Building materials
- Condition of the HVAC system
- The price of comparable homes in the area
- Real estate market conditions
In many cases, these factors will largely be outside your control, barring extensive renovations or repairs. However, there are a few things that can influence your appraisal you can quickly address:
- Dirt, clutter, or general messiness
- Lack of curb appeal
- Personal design choices
Believe it or not, debris and junk in the front yard or outdated and chipped paint can send a negative signal to home appraisers and result in a lower appraised value of the home.
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How could an appraisal affect a buyer?
Your mortgage lender will rely on the appraisal to determine the loan amount. The appraisal can therefore help or hurt a buyer, depending on whether the determination of value falls above or below the home’s sales price.
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The appraisal is higher than the purchase price
If the appraisal is higher than the purchase price, that’s good news — it means you’ve agreed to pay the seller less than what the home’s market value. The mortgage amount will not change at this point since you’re locked in as part of your contract.
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If the appraisal is less than the purchase price
Unfortunately, if the seller is asking for more than the home is determined to be worth, your lender may offer you a counter-offer for a lower loan amount or decline the loan entirely.
This leaves you with few options. You can always accept a lower loan offering utilizing the appraised value and pay the seller the difference between the sales price and the appraised value out of pocket, which might be necessary in a competitive market. A second consideration, you may be able to negotiate with the seller to lower the sales price to be in alignment with the appraised value.
Home appraisal checklist
When you buy a home, you’ll generally have little control over its condition or the appraisal process. But when you sell a home or choose to refinance, you can take steps to ensure that you get the best value possible for your appraisal.
Here’s a quick checklist to ensure you’re paying attention to the same details as a real estate professional:
- What size is the home and lot?
- What is the condition of the roof and foundation?
- Are there any cracks, damages, leaks, or other structural defects?
- How many bedrooms and bathrooms are there?
- How many fireplaces are there?
- What is the quality of the lighting?
- Is the plumbing well-maintained?
- Does it have a swimming pool?
- Is the landscaping attractive?
- Are there any additional features?
- Are all the major appliances up to date?
Answering these questions can help you prepare for an upcoming home inspection or appraisal and give you a better idea of what kind of value and repairs to expect.
Home inspection vs. appraisal
What exactly is the difference between an inspection and an appraisal?
A home inspection might seem similar to an appraisal; indeed, both processes are intended to evaluate the property’s condition. However, a home inspection is solely focused on the home’s condition, while an appraisal is concerned about the home’s value.
This means that while the appraisal can fluctuate based on market conditions, the home inspection is focused on the home’s structural integrity and overall condition. While home appraisals are a requirement for the real estate process, a home inspection is purely optional.
