What affects home appraisal costs?
Several factors can affect the cost of a home appraisal including the type of property, the location, urban versus rural settings, and more.
Property type
The type of home you are selling will affect the appraisal cost. “For example, lakefront properties are almost always complex, and a consumer should expect to pay more for this type of valuation than that of a house in a subdivision,” explains Massey.
Whether you have a multi-family home or a single-family home will also affect the appraisal cost. Generally, the more beds and baths a property has, the more expensive it is to appraise. Multi-family homes will also likely veer from the standard sales comparison approach for determining value, which can add to the cost.
“A multi-family report is six pages long because you have to prepare the income approach,” As Stachurski says. “When it’s a single-family property, the appraisal is four pages long because it’s strictly a sales comparison for the most part.”
Location
Getting an appraisal can cost hundreds of dollars more in certain markets. According to data from Closing Corp, appraisals generally cost a lot more in the Pacific Northwest (or really, anywhere out West) compared to the South. Some of the most expensive markets to get an appraisal include:
- Alaska ($784)
- Washington ($728)
- Hawaii ($719)
- Oregon ($719)
- Montana ($674)
Seasonal factors
If an appraiser is unable to access certain parts of the home that they need to evaluate, any measures to clear the area may add costs to the appraisal at the expense of the homeowner or borrower. Examples include a snow-covered roof or locating a well and septic that aren’t marked on the property sketch.
Property features
Certain features such as a pool or accessory dwelling unit can add time to the valuation process and increase the cost to appraise the home.
Extensive damage
If a home has extensive damage, it takes more effort for the appraiser to determine the fair value. Any unrepaired structural damage will impact your appraisal. While home appraisers aren’t as thorough as home inspectors, and don’t come with a whole toolkit of specialized inspection tools, home appraisers are trained to look for obvious signs of damage, such as cracks in the floors, ceilings, or walls.
Urban vs. rural setting
“If a property is located in a city with a good source of solid data through the local MLS, the appraisal would probably be at the lower end of the price range,” says Spurgeon. “On the other hand, if the property is a large, ornate home in a very rural area on several acres of ground, this would probably be closer to the upper end of the fee range. These price differences are based on the time it takes to complete the appraisals.”
Lack of qualified appraisers
There are likely to be more appraisers available in heavily populated areas as opposed to rural areas. As Spurgeon explains, this is at least partly due to the complexity and difficulty of completing a rural appraisal with limited sales data. When more appraisers are available to work, the price is likely to be lower than in areas where there are fewer available.
The shortage of home appraisers caused delays during the pandemic housing boom as demand outstripped supply. That’s not as much of a concern in the 2024 market as home sales have moderated and appraisal timelines are back to normal. Only 14% of respondents to NAR’s 2023 Appraisal Survey reported delays in completing appraisals in their markets, down from 35% in 2022.
Loan type
Buyers of expensive homes may take out jumbo loans, which are large loans that reach above the federal loan limit. Because jumbo loans are not guaranteed or insured, they are riskier for lenders to provide. Appraisal fees for jumbo loans can be higher, and these types of loans may also require a second home appraisal before closing.
“When it comes to jumbo loans, the properties are so unique you might not be able to find comparable sales in the immediate market area,” says Stachurski. “Jumbo loans require more research to be prepared effectively.”
When it comes to VA home loans, buyers must obtain a VA appraisal. The appraisal fee is set by the VA rather than the lender and is typically priced between $400 and $1,200 depending on the location. Appraisals for FHA loans cost about the same as a conventional appraisal, according to Chase Bank.
Realtors® are going to be a really good resource to connect anybody with anything that they need in the home buying and selling process. And I do get a lot of people asking me, ‘Who do you recommend for appraisal?’ and I’m happy to provide recommendations.
