Home Appraisal Fees: Defined & Explained
During escrow, after the home inspection has been completed and the buyers have received conditional loan approval, there's usually an appraisal conducted to determine the value of the property being sold. Read on to learn what's involved in an appraisal and what it costs.
What is an appraisal:
If a buyer is taking out a loan to pay for the house, banks almost universally require an appraisal as part of approving a loan. To avoid the appraisal contingency as a seller, you generally need to find an all-cash buyer.
Lenders typically hire a professional appraiser to evaluate a real estate property and ensure it is worth the sales price, before approving the buyer’s loan to purchase it. The appraiser evaluates the property and compares it to other, similar properties in the area to determine the home's true market value. They'll also look at local real estate trends, such as how many short sales or foreclosures are in the nearby area.
What does an appraisal cost?
There is a fee associated with this service that usually runs between $300 and $500. This fee is most often paid for by the buyer and can be built directly into their loan amount.
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