If you need to know how much your home is worth, a house appraisal from a professional appraiser will be needed. This is normally something that the home buyer has to pay for, but there are situations where the homeowner will organize the appraisal.
Home appraisals can help find the best price to sell your property for, as well as give you ideas for home improvements that will boost the value. But how much is an appraisal going to cost you?
Home Appraisal Costs Can Vary
Though the prices will differ across the country, you can typically expect to have to spend somewhere between $450 and $750 for your home appraisal.
This could seem expensive, but the appraiser is licensed and has trained in the profession. You are paying for the time it takes them to view your property, compare it to others, and complete an appraisal report.
The cost you have to pay for appraising a house will not only depend on your location, however.
What Factors Affect the Cost of a Home Appraisal?
There are a few considerations that will affect the cost of appraising a home. Let’s take a look.
The Type of Home
The type of property that you want to be appraised can affect the value. If there is more work involved for the appraiser, naturally, the price will be more.
A lakeside home would be more expensive to appraise than a property in a subdivision. Larger luxury homes can also require more work and cost more.
The Location of Your Home
If the home is located in a big city, typically, the fee will be lower. This will be the case because there is a lot of data for the appraiser to make their job easier.
Whereas if the home is located in a less densely populated location, fees are typically going to be more. Since there will be less comparable data for a home like that, the appraiser will have to do more work to establish the fair market value.
Qualified Home Appraisers
The location of the home can also affect the fees involved with appraisals in other ways. Rural locations are less likely to have nearly as many appraisers as found in a big city. For this reason, less competition will mean prices are higher. Add to that the fact that the appraiser’s job is more difficult because there is less comparable sales data, and you can understand why the price is higher.
If the home falls into the category of a jumbo loan, two appraisals might be required. Whereas this applied to homes that required loans over $500,000, this limit is now $1.5 million in most cases.
The Benefits of Home Appraisals for Sellers
Though the buyer of a home is the one that normally pays for the appraisal to get their mortgage approved, there are benefits to sellers for going through this process as well. Understanding what appraisers look at can put you in a position of strength. You will be able to make improvements or modifications that will positively influence your property’s value.
Keep in mind the best real estate appraisers are extremely thorough. They will be looking over both the interior and exterior with a fine-tooth comb. Besides measuring your home’s size, they will be looking at features that affect the value both positively and negatively.
You can expect the home appraiser to look at things like:
If you are thinking about selling your home to move somewhere else, it can help a lot to know your property’s exact value. It will let you know if you can afford to move to the area you want to live in and help decide how much to price your home for.
Zillow Home Values Are Not What Your Home is Worth
It is worth noting that Zillow home values you see on their site are NOT what your home is worth. There is a significant difference between a home appraisal done by a professional vs. a computerized estimate using an algorithm that may not be accurate. Without setting foot in your home, it is impossible to determine its value.
If you rely on the Zillow home value to price your property, you will probably end up making a big mistake that could cost you money.
An Appraisal Can Help With Home Improvements
An appraisal can reveal upgrades to your home that should improve its value and give you a higher selling price. If you are in an area with higher-priced homes, improvements to your property can certainly raise the value. An appraisal should give you some valuable information about what improvements will work best.
Real Estate Appraisals Can Get Rid of PMI
If you bought a home and put less than twenty percent down, you’re probably paying what’s known as private mortgage insurance or PMI for short. Private mortgage insurance is expensive and should be removed as soon as your able. An appraisal can help determine if you can get rid of the PMI you are paying.
Appraisals Are Used In Family Matters
If you are selling a home to a member of your family, an appraisal will make sure everyone is being treated fairly. This can help avoid any family disputes, making sure disagreements between the parties are minimized.
If you have inherited a property, a home appraisal can be a good idea here as well. It will allow you to raise your tax base so that you can avoid paying taxes on the property. This could potentially save you thousands of dollars on taxes.
Lenders Will Use Appraisals For Foreclosure Decisions
Real Estate appraisals can also be used by lenders who think about doing a foreclosure on a particular property. The appraisal will allow them to determine what they could be looking at in terms of a potential loss on the property.
It might seem like the house appraiser doesn’t do very much, walking around houses and taking some notes. But that is only part of what they do. A lot of work goes into finding comparable properties, analyzing the data, and creating the report.
It isn’t necessarily best to just go for the cheapest home appraisal option, as you need to make sure they do their job properly to find the value. To make sure you get an accurate appraisal of your home, use recommendations and online feedback.