If you’re about to purchase your first home, one of the first things a bank or lender will ask for is money to pay for an appraisal. On most homes, the cost of an appraisal will range from $400-$600 dollars. Why do you need one?
An appraisal is something a lender requires to determine if the house you want to buy is worth the money the bank is about to lend. Just because a seller lists a sales price and you agree to pay it doesn’t mean the house is worth that price. An appraisal should be done by a licensed appraiser who will look at three other homes that recently sold, of similar size and character, in the neighborhood or surrounding area. The value given by the appraiser is technically “an opinion of value” on that day. Property values can and do change over time.
The appraiser will make “adjustments” for size, age, condition and other factors. Even though the appraisal was paid for by you, it actually belongs to the lender. However, under new federal laws, lenders are obligated to give you a copy. In most instances, you have nothing to worry about. The appraisal is protection - not just for the lender, but for you too. You can learn more about the appraisal process at Realtor.com. Just remember, it’s better to be sure you’re getting what you pay for when you make what will probably be your biggest purchase – a new home!
