How Much Home Appraisals Cost and Factors That Affect It

Whether you’re looking to refinance your home mortgage or considering buying a new home, a home appraisal is an integral part of either process. But what exactly is a home appraisal? And, how much does a home appraisal cost? What factors affect the cost? How do you calculate appraisal costs? Who bears that expense? We’ll answer these questions and more in this short read.

A licensed expert conducts a home appraisal to establish the value of your residence. There are two main reasons for this procedure. Home sellers arrange for an appraisal before listing their property on the market to arrive at an accurate asking price. More often, mortgage lenders demand an appraisal to verify that the property’s value is equal to or exceeds the loan amount. And, makes an offer based on the loan to value (LTV) ratio.

The expense associated with a home appraisal might vary, potentially amounting to several hundred dollars, influenced by factors such as property size, location, features, and recent comparable sales in the area.

What is a home appraisal?

A home appraisal is an estimation of the value of a home according to a qualified professional aka a home appraiser.

These professionals are third-party appraisers, who are in no way connected to the sellers, buyers, or mortgage lenders associated with the home in question.

This makes sure that the appraisal is an unbiased, objective estimate of the home’s value.

How important is a home appraisal?

Home appraisals answer the all-important question, “How much is my home worth?”

This information is important if you’re looking at selling your home because it helps you decide how to price your property while putting it on the market.

It is also helpful if you’re buying a home since it will tell you the sales price of your prospective dream home.

It also helps lenders, be it for refinancing or for purchasing a new home, ensure that the homeowner does not get paid more than the actual value of the property.

Once a home has been appraised, the lender can then offer a loan based on the loan-to-value ratio.

A home appraisal is also instrumental in deciding the interest rate the lender will charge on the loan. A loan to purchase a well-maintained home will usually have a lower rate of interest than a loan to buy a fixer-upper.

What does home appraisal work?

A house appraisal process involves looking into a number of factors, including the size of the home and square footage of the plot, construction materials used and style, age of the property, location of the property, upgrades, and renovations, curb appeal, current market trends and the rate similar homes have been sold for in that neighborhood in the recent past.

Most professional appraisers use Fannie Mae’s Uniform Residential Appraisal Report Form to guide them through the appraisal process.

The process involves an on-site visual inspection of the property in question and a look at recent real estate valuations. These comparable sales are called comps.

Evaluators will use these comps to adjust the value of a home either upwards or downwards.

For example, a home with a particularly unique location, a larger backyard, or high ROI home renovations may get a higher valuation than other properties in the same neighborhood.

On the other hand, factors such as dated appliances, long pending repairs, and water damage are likely to hurt the home’s valuation.

Other factors that will be considered include whether the neighborhood is urban, suburban, or rural, how much working space is available, whether it is close to a business district or not, and accessibility to public transportation.

Is home appraisal always necessary?

Home appraisals are required for conventional mortgages and home loans such as VA loans and FHA loans.

Once the inspection is complete, the appraiser reviews neighborhood comps and arrives at a fair market value of the home. The appraiser then generates a report that features an accurate description of the home, the size of the land, the market conditions in the neighborhood, and more.

The processing of the loan depends on whether the home is appraised at the purchase price or lower. If the valuation is higher than the purchase price, it does not pose a problem. However, if the valuation is lower, the lender is likely to change the terms of the loan, since the loan amount cannot be more than the value of the property.

The entire process of getting a home appraised can take around a week or more to complete. A valuation holds good for around 120 days or 4 months. If the home is not sold within that time frame, another home appraisal will need to be done.

Who bears the home appraisal cost?

The home appraisal fee is borne by the buyer, or in the case of refinancing a home, the borrower. That is to say, in a real estate deal, the appraisal fee is generally initiated by the mortgage lender representing the buyer and is covered by the homebuyer. This fee constitutes a part of the closing costs incurred by the buyer.

As stipulated by federal guidelines, neither the purchaser nor the seller retains the authority to select the appraiser independently.

Who selects the home appraiser?

The mortgage lender usually determines who is going to appraise the property, but you can always check the government registry of licensed real estate appraisers to make sure the person appraising the home has the necessary qualifications and credentials.

Once the lender orders an evaluation, a thorough home inspection (checking HVAC system features and safety) is carried out by the licensed professional.

What is the average home appraisal cost?

The cost of a single-family home appraisal could vary between $200 and $800, with the national average hovering around $500.

The actual cost depends on a number of factors, including the type of home, the size of the home, the location of the property, the amount of appraisal work required from the evaluator, and the condition of the property.

A well-kept home requires less work from the evaluator and is therefore likely to cost less than appraising a dilapidated home will.

Similarly, a large, multi-story home will have a lot more area to cover, and will, therefore, cost more to appraise.

Single-family homes with many unique renovations and features will be more challenging to evaluate since there won’t be too many comps available to compare them to. This may make the evaluation more expensive as well.

Expect to pay more for a home appraisal if you live in a remote area since the appraiser won’t really have too many comparable sales to use while evaluating your home. This will mean more research will be needed to arrive at a number.

Which factors affect the total home appraisal cost?

Mortgage type: Government-backed loans necessitate unique evaluations that not only determine home value but also assess if the property meets federal safety standards. Such home appraisals for FHA and VA loans can be pricier than in the case of conventional mortgages.
Size of the property: The cost of appraising a larger property is typically higher due to the increased effort involved for the appraiser.
Extent of necessary repairs: Anticipate a higher appraisal cost for a home requiring significant repairs, as the appraiser needs to put in extra work.
Purpose of the appraisal: Whether the appraisal is for a mortgage, tax assessment, legal proceedings, or other purposes can influence the level of detail, and the cost.
Availability of comparable properties: If the home is in an isolated location or has unique features, and there are fewer comparable properties, the appraiser might raise the cost due to the additional time needed for evaluation.
Seasonal factors: During certain times of the year, you could face higher charges if conditions make property access more challenging for the appraiser.

Is there a home appraisal checklist?

Here’s a list of what home appraisers generally look for.

Potential health and safety hazards.
The structural integrity of the roofs, walls, etc.
Visible defects
The general upkeep of the home
Upgrades and renovations
Any specific areas the lender may have asked for an inspection of.
Additionally, an appraiser can demand an inspection of the roof, water or even for pests if they deem it necessary.

Home appraisals vs. home inspections: What is the difference?

Both home appraisals and home inspections are vital while buying a house. However, there are important differences between the two.

A home appraisal is mandatory for the lender to decide the value of a home. A home inspection, while advisable, is not mandatory. This is why a lender will schedule a home appraisal, but the onus of scheduling a home inspection is usually on the buyer.

A home inspection tells buyers about the condition of the home they are interested in. Importance is given to the functional aspects of the home, such as the HVAC and electrical systems, the structural integrity of the roof, the walls, etc.

A home appraisal goes beyond just that, using the condition of the home as one of the factors while comparing the property with other comparable homes sold recently in the area to arrive at a valuation of the home.

Key takeaway

Upon seeking a home loan, it’s customary for a lender to demand a property appraisal, regardless of whether you’re in the process of purchasing a house or refinancing a mortgage. In most cases, the homebuyer or the borrower pays for the appraisal and home inspections.

Appraisers physically visit your property and evaluate aspects such as location, age of house, condition, structure, size, updates, and style. They also analyze comparable homes in the local market.

Appraisals must be unbiased in assessing the property’s value.

Home appraisal cost and factors that affect it was last modified: July 1st, 2025 by Narayan Shrouthy

Written by Narayan Shrouthy. January 1, 2022

Narayan is a content writer for Kukun. With experience in both content writing and editing, Narayan mixes his writing and love for reading with his passion for music. As an active musician, He aims to be a key player in Kukun's content experience.