Getting a home appraisal is vital if you need a mortgage to buy a home. Your lender isn’t going to offer a loan on a house that isn’t worth what you’re paying for it, unless you come out of pocket to put down a much larger down payment. The appraisal will be ordered by the lender, but you’ll be paying for it. Because of that, you want to know the home appraisal cost and make sure it’s a fair one. That way there’s no risk of you overpaying for your appraisal, since some lenders will try to tack on other kinds of fees to that bill. If you’re concerned that might be happening, question the lender and protect your finances from overpaying as you start you home buying journey.
How much does an appraisal cost in your area?
When you’re buying a home, you need to be diligent. Your real estate agent is an excellent resource, and can help you communicate with the lender if you’re having trouble getting information. Since your agent has most likely worked with a number of different lenders in the area, they can also give you a good indication of whether your appraisal fee is higher than what is typically seen. If you’ve lived in another area and recently moved to the one you’re in now, appraisal fees can vary by location. A higher fee in your new area doesn’t mean that you’re being overcharged, but it’s important to check into it and make sure. Most lenders don’t add extra fees to the appraisal costs they pass along to you, but that doesn’t mean it can’t happen.
Have you checked with appraisers?
While you can’t order an appraisal on a home you don’t own, you can call around and ask appraisal companies how much they charge for a standard appraisal. That way, you can find out whether most companies are asking about the same amount of money, or whether some want much more than others. It’s possible that there are companies in your area that charge more, and those are the companies your lender typically uses. You can ask about using a different company to get the price down, but the lender may not agree. Often lenders have established relationships with appraisers they have worked with before, and they want to continue working with those same companies.
Should you find another lender?
Because the purchase of a home is such a significant financial event, you want to work with a lender you feel good about. If you have evidence that you’re being overcharged for your appraisal, you may want to find a different lender. That’s especially true if the lender you currently have won’t lower the appraisal fee or if there are other fees and charges that are getting added to your loan. Be sure to ask any new lenders you’re considering about their other fees, though. It wouldn’t make financial sense to switch lenders for a lower appraisal fee, only to be charged higher fees for other things. A home appraisal is such an important part of getting a loan, and you want to be sure that you’re being charged fairly for it. However, there are also other considerations.
Did you talk to your lender?
Your lender will contact the appraiser, so be sure to ask that lender how much they will be expecting you to pay for an appraisal fee. Then, make sure that’s actually what you’re charged. You don’t want to be told one thing, and then get to closing and find out that the fee is much higher. At that point you can either just pay the higher amount, or you can stop and insist that the lender reduce the fee to what you were originally quoted. That will delay your closing, though, which most people don’t want to do. Generally, they just pay the higher fee, rather than try to have it reduced at the last minute. Buyers should be given their closing statement at least a day before closing, though, giving you time to call your lender if you see a discrepancy.
What should you do about overcharges?
You don’t want to alienate your lender or your real estate agent by arguing over a small difference in price on an appraisal. That doesn’t mean you should just pay whatever the lender wants for an appraisal, though. There are many nice ways you can ask your lender about the appraisal charge without demanding answers or coming across as angry. It’s important that you can discuss things with your lender, since you will have a relationship with that company for potentially the next 30 years. While you definitely don’t want to be overcharged, you also want to consider the value of the loan, how you feel about the lender overall, and the other kinds of fees and charges you’re being asked to pay from that lender.
2 Point Highlight
A home appraisal is such an important part of getting a loan, and you want to be sure that you’re being charged fairly for it.
Your lender will contact the appraiser, so be sure to ask that lender how much they will be expecting you to pay for an appraisal fee.
