Key takeaways

  • Home appraisals are typically required by mortgage lenders before the loan can be approved.
  • The cost can run several hundred dollars, and can depend on factors like the home's size, condition and more.
  • Appraisal fees are typically paid by the buyer as part of their closing costs.

A home appraisal is conducted by a licensed professional to determine what your home is worth. Sometimes, sellers arrange an appraisal before they put the property on the market to ensure they’re asking the right price. More commonly, though, a buyer’s mortgage lender will require an appraisal once the purchase contract is signed, to confirm that the home is worth at least the amount of the loan. The cost of a home appraisal could run several hundred dollars, depending on factors such as property size and location. Read on to learn more.

How does a home appraisal work?

Appraisers typically visit a home in person and analyze a number of factors, including its location, age and condition, structural construction and materials, size and square footage, updates and improvements, style and curb appeal. They will also consider the local market conditions and the overall economy.

By law, appraisals are required to be independent and objective. An appraiser will conduct a visual inspection of the home and look at recent home sales in the area, known as comparables or comps. Based on the information gathered, the appraiser will determine the home’s value.

With rare exceptions, lenders always require appraisals both for home purchases and mortgage refinances.

Home inspection vs. home appraisal

Don’t be confused by the difference between these two similar terms. Appraisals and inspections have some similarities, in that they both involve a professional examining the condition of the home. Both services can cost about the same, too. But, unlike an appraiser, an inspector’s goal is to evaluate the home for signs of safety problems, damage or issues in need of repair. An appraiser might assume the dishwasher is working if it’s not visibly leaking, for example, but a home inspector would run it to confirm it functions properly. The home inspection evaluates the property’s safety and structural soundness; the home appraisal evaluates its value.

Why is an appraisal needed?

Home appraisals benefit homebuyers as well as homeowners. “An appraisal is always in the best interest of the buyer, as it will assess the value of the property and help the buyer have confidence in the purchase price of the home,” says Jackie Boies, senior director of partner relations at Money Management International.

It’s also a useful tool to establish the parameters of the mortgage loan.

“Once the value of the home is established through the appraisal, the lender can make an offer based on the available loan-to-value ratio,” says Bruce McClary, senior vice president of membership and communications at the National Foundation for Credit Counseling. “Property appraisals also help determine the cost of the loan. A well-maintained property can lead to a loan with a more favorable interest rate than one that is in disrepair, because of the direct effect on loan-to-value ratio.”

How much does a home appraisal cost?

The typical price for a single-family home appraisal is $500, according to a 2023 survey by the National Association of Realtors. The survey found that this cost can range from less than $300 to $800 or more, though, depending on a number of factors — including the size of the home, the value and condition of the property and the level of detail involved in the appraisal. A large home or property will usually cost more to appraise, as will one in a larger city or an area with a higher cost of living.

HomeAdvisor data reports a lower price range of between $313 and $422, with most single-family home appraisals costing around $356.

A professional appraiser’s fees are regulated in part by federal law — the Dodd-Frank Wall Street Reform and Consumer Protection Act — and must be reasonable and customary for the geographic market.

What factors influence home appraisal cost?

Property size Generally, a larger property will cost more to appraise.
Needed repairs Expect to pay more for a home with extensive damage, because it requires extra effort on the appraiser’s part.
Amount of comps If the home is isolated or has unusual features and there are fewer similar properties, the appraiser might charge more for the additional time it will take to evaluate.
Seasonal conditions You might be charged more at specific times of year if conditions make it more challenging for the appraiser to access the property.

Who pays for a home appraisal?

In a real estate transaction, the appraisal is typically ordered by the buyer’s mortgage lender and paid for by the homebuyer. It’s one of the buyer’s many closing costs.

Under federal regulations, neither the buyer nor the seller can choose the appraiser themselves. The lender is also prohibited from having a relationship with the appraiser so that there is a fair, unbiased valuation of the home.

How do you find an appraiser?

Ask your real estate agent for a recommendation. Make sure that the appraiser has experience doing appraisals for home sales and is familiar with your property type specifically. The government maintains a national registry where you can verify the appraiser’s credentials.