The Federal Housing Administration does not set maximum appraisal fees for FHA loans , 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 starter home 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. When you're buying a home , 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:. Sale prices of comparable homes recently sold in the area. Types of interior and exterior materials. Amenities, such as fireplaces or decks. Both an appraisal and a home inspection are important in the homebuying process , but they serve different purposes.
A home inspection 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 home value. 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.
These are the characteristics that appraisers look for during the appraisal appointment :. A recent remodel could give you a value bump, says Spurgeon. Major components big-ticket items such as a new roof or air-conditioning system also carry weight, especially for older homes.
And we just put a new roof in last year, and it was this much money. Petersburg, Fla. Appraisers look at the size, shape and topography of the lot, including easements and encroachments. The appraiser will also note amenities such as street utilities and vehicular access. According to Bethany White , a top Virginia Beach agent with over 13 years experience, FHA appraisal requirements tend to be stricter than conventional loan appraisals.
For these reasons, a strong appraisal is always desired. Here are some simple tips to increase the potential appraisal value of your home:. Although some buyers and sellers treat the home appraisal process as an afterthought, planning ahead for the impact of a potential home appraisal can be extremely beneficial. Preparing for an appraisal can help you maximize your sale price and avoid the potential complications of being unable to afford the down payment on a home priced higher than its market value.
Shopping for your first home? Financial Management Insurance Locations. April 20, What is a Home Appraisal? Selling Your Home? Here are some simple tips to increase the potential appraisal value of your home: Clear out clutter from your home. Have your home professionally staged.
First appearances make a big difference.
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