The Average Cost of a Home Appraisal

The average cost of a home appraisal can vary depending on several different factors. Before entering into the appraisal process, it is important to know what an appraisal is, the different approaches taken to appraise your home and how much it costs in order to prepare you for what‘s ahead.

 

What Is An Appraisal

When buying a home, it is necessary to have it appraised to determine it’s worth. An appraisal is a written statement of the value of a home. This is determined by calculating several different factors, in addition to analyzing market conditions in the area where you reside. Buyers and sellers may minimize the value of a home appraisal, but it remains an important piece of purchasing real estate. A home appraisal must be performed by a licensed appraiser who is knowledgeable about estimating the current value of a home. During this process, the appraiser visits the site to take pictures both inside, outside and take measurements. An examination of the property occurs in order to identify any issues or improvements made to the property. This is necessary in order to place an accurate value on the home.

Appraisal Approaches

A cost approach is one way of determining the value of a home. It is usually used for insurance purposes and involves utilization of the current rate of building the home per square foot. The cost approach also includes the cost of upgrades or repairs to reflect replaceable value. The figure determined by the cost approach does not always coincide with the market value on the appraisal. Another approach is the market approach, which calculates the value of a home by conducting research on the current market trend in a specific area. In doing so, they compare the home in question to similar homes in the same area that were sold. In doing this, the square footage and amenities of the homes must be similar.

Appraisal Cost

If you look online, many appraisal companies online will ask you questions such as the square footage of your home or property, where is it located and what is the purpose of the appraisal. The average cost of an appraisal runs between $300-$400 dollars depending on the company you choose. Some companies may charge more as a result of The Home Valuation Code of Conduct, which raises costs to the customer and reduces the appraisers pay while creating inefficiencies. Where $350 was the average rate for an appraisal, it is now $400. An appraisal management company takes $100 out of the cost, just for picking an appraiser. If the bank were to honor the old price, then the appraiser that once made $350 would now only make $250.

When conducting the home appraisal, the appraiser will take note of any deficiencies or improvements made and compute them into the final value. Depending on the deficiency, maintenance or repairs may be required before the home can sell . After the repairs are made a final inspection would take place. As noted above, an appraisal is essential in buying a home so it is important to be prepared to pay the cost for a qualified professional to appraise your home.