The Average Cost of a Home Appraisal
According to the American Society of Appraisers, a professional appraisal is a thorough report regarding a property used to estimate property value as accurately as possible at a specific point in time. It typically requires several hours to to gather information, evaluate it and then calculate an appraised value. Appraisal costs vary depending on a number of factors.
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Function
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Appraisals are a snapshot of a property Appraisals are considered a "function of value" and are used by banks or other lenders for mortgage purposes. When purchasing, refinancing or applying for a second mortgage, the lender will require an appraisal to determine a maximum loan amount. The property value is also used by insurance companies to determine annual premiums, or by the local tax assessor's office to calculate property taxes.
Types
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Large properties take a lot of time The Uniform Residential Appraisal Report (URAR), commonly known as a full appraisal, is a comprehensive document that details all aspects of the subject property inside and out. A modified version is a "drive by" or "exterior only" inspection. An electronic property appraisal is an automated computer program created to replicate a conventional appraisal by using complex algorithms.
Rental property appraisals require an operating income statement and rent schedule, which includes further research and complex calculations. These schedules are in addition to the full, modified or electronic report.
Federally funded loans, such those backed by the Veteran's Administration or the Federal Housing Authority, require specialized and additional forms.
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Significance
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Property value determines loan amount Appraisals are a major component in the real estate market. Even though they are an opinion, this number is based on training, experience and complex mathematical calculations. An appraised value of any property determines the amount that can be borrowed for mortgage purposes and lines of credit. For a homeowner who wants to sell, the appraised value of a property determines the selling price. If this number is below what's owed on the property, the owner will be required to pay the difference. For a buyer, if the appraisal is above its actual market value, they will pay more than is really necessary. Either way, the appraised value of a property could potentially cost or make a buyer or seller thousands of dollars.
Costs
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Rural appraisals cost more According to the Appraiser Loft's pricing generator, a full appraisal for an owner occupied single family home in New York City costs about $350; in Bend, Oregon it's $475. Clearly, appraisal costs are not set in stone and vary greatly from region to region. An appraisal will cost several hundred dollars regardless of location and the price goes up depending on subject property variables such as a rental properties, federally funded mortgages and large estate homes that have excessive square footage or outlying structures such as barns or guest cottages.
Tips
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Appraisals for VA loans are specialized Since appraisals are powerful reports, it's prudent to pay attention to the neighborhood and gather information. Talk with neighbors about their property value and take a good look at the surrounding area. A tidy locale is considered more beneficial and may increase appraised value.
Keep a record of home improvements including receipts (if available) and tell the appraiser. Avoid asking the appraiser to inflate property value. This is illegal in some states.
A fresh coat of neutral paint will freshen up any room. If painting is not an option wash the walls, door jams and baseboards. At the least, clean thoroughly inside and out. Pick up any trash and leaves. Trim the bushes and sweep the driveway, porch and patio.
The mission is to present the property in an extremely positive manner and a few hours of work around the house often helps to increase its appraised value.
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References
Resources
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