Are you looking to get a home appraisal done but aren’t sure how much it costs? Home appraisals are a crucial component of the home buying process.
Also known as a property valuation, a home appraisal is an unbiased professional assessment of the value of your home. A home appraisal helps determine the market value of a home, and it ensures that the price the buyer and the seller have agreed upon is fair for both parties.
How much does a home appraisal cost? Who pays for the home appraisal? Keep reading our home appraisal guide to learn.
How much should I pay for an appraisal?
The cost of a home appraisal will depend on several factors, but generally speaking, you can expect to pay between $300 and $450. The property’s value, the size of the home, the property’s condition, and the details involved in the appraisal can cause the overall price to go up.
If you live in a large city and you’re looking to purchase a big home, you can expect upwards of $500 to $800 for an appraisal. Also, if the house has extensive damage, you can expect to pay more for an appraisal, as this requires more work on the appraiser’s part.
Do you have questions related to damage to your property? Click here to get some answers!
Who pays for a home appraisal?
Generally speaking, the buyer pays for the appraisal. The buyer can either pay upfront for the appraisal or the appraisal fee can be included in the closing costs.
What hurts a home appraisal?
Of course, the seller also has a lot at stake when it comes to the home appraisal. If the appraisal doesn’t go accordingly and the appraiser finds issues with the property, it can affect the home’s estimated value. If this is the situation, the buyer may want to back out or ask for a lower price.
Some factors that may negatively affect the appraisal may include:
- Outdated systems, appliances, or interiors such as the electrical, plumbing, or HVAC
- Construction and structural materials
- Unique or rural homes that can be difficult to assign value to
How much does a home appraisal cost in Colorado?
In Colorado, you’ll pay between $300 and $100 for a home appraisal. As we mentioned above, the actual cost will vary depending on the size of the property, the location, and other factors.
Because Colorado has higher living costs, don’t be surprised if your home appraisal costs more than $1000.
Can the loan be denied after appraisal?
Lenders aren’t allowed to lend more than the appraised value of the home. If the home appraisal value comes back lower than the sale price, you either need to pay the difference out of pocket, or you can renegotiate to a lower price. If you can’t do either of these options, your loan will be denied.
Does a messy house affect an appraisal?
Generally speaking, a messy home won’t affect the appraisal. Appraisers are trained and licensed professionals who know how to look past the mess to figure out the actual value of a home.
That said, you should still try to clean up as best as you can before the appraiser comes over. This will make it easier for them to move around your home and assess its value.
Do I get my appraisal money back at closing?
Generally, appraisal refunds aren’t issued. An appraisal fee is a third-party fee, so it’s non-refundable. For this reason, you want to make sure you really like the property, and you’re ready to buy before you fork over the money for an appraisal.
How long does a home appraisal take?
A home appraisal will typically take a couple of days to a week to complete. First, the mortgage lender needs to order and schedule the appraisal. Then, the appraiser gathers data about the home and reviews it to complete the appraisal report. How long the appraisal takes depends on the complexity of the property, the appraiser’s schedule, and other factors.
The actual appraisal appointment takes about 30 minutes to 3 hours, and the length of the appointment will depend on the complexity of the property, the integrity of the exterior, and the internal condition of the home.
Can lenders pay for the appraisal?
While most lenders require an appraisal as a part of a condition of the closing, the buyer is still expected to pay for it. In some cases, the buyer can negotiate with the seller to pay for part or all of the appraisal, but don’t count on this.
What are red flags for underwriters?
Potential red flags that underwriters look out for include:
- A debt to income ratio that is too high
- Last-minute purchases
- Large, undocumented deposits
- Fluctuating income
- Credit issues, typically reflected by a low credit score
What happens to earnest money if the loan is denied?
If you include a financial contingency in your real estate contract, then you can protect your earnest money. Earnest money is classified as a good faith deposit, and it shouldn’t be confused with a down payment. If your loan can’t be secured and you can’t buy the house, then you can take back the earnest money.
However, without the financial contingency, you’re out of luck, and the seller will get to keep the earnest money.
Who pays for an appraisal if the loan is denied?
Because an appraisal fee is a third-party fee, you won’t get your money back if the loan is denied.
Appraisal Costs: Wrap Up
Now that you know more about appraisal costs, it’s time to set up an appraisal if you’re ready to buy a home. You can find a certified appraiser via websites of appraisal organizations, or you can ask your real estate agent or lender for recommendations.
Are you looking to improve the exterior of your home before getting an appraisal? If so, contact us today!