How a Home Appraisal Works and How Much It Costs

A home appraisal is a professional opinion of a property's value. A home appraisal typically costs between $300 and $400.
Barbara MarquandJan 26, 2021
How a Home Appraisal Works-story

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When you apply for a home loan, a lender will usually require an appraisal of the property, whether you're buying a house or refinancing a mortgage.

A home appraisal is a licensed or certified appraiser's opinion of a home's value. The appraisal is based on research of recent sales of comparable homes in the area, an analysis of the property and the appraiser's judgment.

The mortgage lender requires an appraisal to help gauge risk of making a loan. The property serves as collateral in case the borrower defaults, so the lender wants to make sure the loan isn't too big compared with the property's value.

A home appraisal typically costs about $300 to $400, with a national average of $339, according to HomeAdvisor, a digital marketplace for home services. But home appraisal quotes can start at $600 in some metropolitan areas, and fees can exceed $1,000 for larger or more complex properties.

Here are some of the factors that affect how much you'll pay for a home appraisal:

require special appraisals. Besides estimating home value, these evaluations assess whether the property meets minimum structural and safety requirements set by the federal agencies that will insure or guarantee the loan. As a result, an appraisal may cost more when a government-backed mortgage is involved.

The average appraisal cost is from $400 to $500 for and VA loans, compared with $300 to $400 for conventional mortgages, according to HomeAdvisor.

The Department of Veterans Affairs limits how much appraisers can charge for . The maximum appraisal fees vary by state and sometimes county. Nationwide, maximum range from $425 to $875 for single-family homes, condos and manufactured homes. Appraisers can ask for permission to charge additional fees for mileage and the extra time required to evaluate complex properties.

The Federal Housing Administration does not set maximum , but simply requires that fees be "customary and reasonable" for the areas where properties are located.

Home appraisal costs are higher in big cities or other places where the cost of living is higher than average.

Appraisals will generally cost more for unusual, complex or large properties, which sometimes require additional visits to the sites or extra research to determine value. A luxury waterfront house in a remote area will take more time to evaluate than a in a tract subdivision, for example.

When a mortgage is involved, the lender selects and hires the appraiser, and the mortgage applicant pays for the home appraisal.

That means the buyer pays for the appraisal for a home purchase, and the homeowner pays for the appraisal when refinancing a mortgage.

No lender is involved when you're buying a home with cash, so no appraisal is required. But you might want to get an appraisal anyway to ensure you don't pay more than the property is worth. In that case, you'd hire the appraiser and pay the fee.

An appraisal is usually required for a purchase or refinance mortgage, but some government refinance programs generally don't require appraisals, including , VA interest rate reduction refinance loan, or , and USDA streamline loans.

When you're , the lender will order the appraisal after you've made an offer and signed a purchase agreement. When refinancing a mortgage, the lender will order the appraisal after you apply.

You can ask to accompany the appraiser on the walk-through of the property as long as it's OK with the lender, according to the Appraisal Institute, a professional association of real estate appraisers.


Real estate appraisers consider many details to determine a home's value. The appraiser will do market research and usually visit the home to examine the property. Here are some of the factors they take into account:

Both an appraisal and a home inspection are important in the , but they serve different purposes.

A is for evaluating a home's condition. The inspector walks through and checks the structure from top to bottom, including the walls, ceilings, floors, windows and doors, as well as the mechanical and electrical systems, appliances and plumbing. After looking at everything, the inspector provides an objective report, including repair recommendations.

An appraisal is an assessment of . The appraiser considers the home's condition as part of the analysis of how much the property is worth, as well as other factors, such as the local housing market. The appraiser doesn't make recommendations for repairs.

As the mortgage borrower, you have a right to a free copy of the appraisal report at least three days before the loan closes. It's a good idea to read the report to check for accuracy.

Let the lender know if you find errors and think the estimated value is wrong. Any pertinent information you provide could lead the appraiser to reevaluate. You may also ask the lender for a second appraisal. Keep in mind you'll have to pay for the appraisal if the request is granted.

If the appraised value is less than expected on a home you want to buy, you may be able to use that information to negotiate a lower price with the seller.

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