Table of Contents
- Who pays for an appraisal when buying a home?
- Who pays for an appraisal when selling a home?
- Who pays for an appraisal when refinancing?
- Who orders the appraisal?
- When is the appraisal fee paid?
- Home appraisal cost
- Who pays for an appraisal on new construction?
- Do cash buyers need an appraisal?
- Who pays for a private appraisal?
- The short answer
In a financed home purchase, the buyer pays for the appraisal, even though the buyer's lender orders it. In a refinance the borrower pays, and for a private appraisal (an estate, a divorce, a tax appeal) whoever hires the appraiser pays.
Sellers rarely pay for an appraisal unless the purchase contract says they will. The rest of this guide covers who orders the appraisal, who picks the appraiser, when the fee is due and the exceptions.
Who pays for an appraisal when buying a home?
The home buyer pays for the appraisal in almost every financed purchase. The buyer is the one asking for the loan, and the lender needs the appraisal to confirm the house is worth enough to secure it.
That is true for first-time buyers and repeat buyers alike, and for conventional, FHA, VA and USDA loans. A few situations change the answer:
- The buyer pays cash. No lender means no required appraisal, though the buyer can still order one.
- The contract has the seller pay. A buyer can negotiate for the seller to cover the appraisal or give a credit toward closing costs.
- The lender covers it. Some lenders pay the appraisal fee as a promotion or through a lender credit.
Who pays for an appraisal when selling a home?
The seller usually does not pay for the buyer's appraisal. Sellers already cover agent commissions and often repairs or staging, but the appraisal belongs to the buyer's loan, so it is the buyer's cost.
The exception is a contract term that shifts the fee to the seller. Sellers also sometimes order their own pre-listing appraisal to set a list price. That one is separate from the lender's appraisal, and the seller pays for it.
Who pays for an appraisal when refinancing?
The borrower pays for the appraisal in a refinance. The lender orders it to confirm the home's value, which sets the loan-to-value ratio and how much the borrower can take out.
Some refinances qualify for an appraisal waiver, and some lenders offer to cover the fee. When neither applies, the borrower pays.
Who orders the appraisal?
For a mortgage, the lender orders the appraisal, not the buyer, the seller or the real estate agents. Appraiser independence rules keep anyone with a stake in the deal from choosing or pressuring the appraiser.
Many lenders place the order through an appraisal management company (AMC), which assigns it to a local appraiser. Many lenders won't accept an appraisal ordered by a different lender, so switching lenders mid-deal can mean paying for a second appraisal.
Who picks the appraiser?
The lender or its AMC picks the appraiser for a mortgage. Borrowers can't choose or request a specific appraiser for their loan.
For a private appraisal you choose the appraiser yourself. Here is how to choose a qualified home appraiser.
Who schedules the appraisal?
The appraiser schedules the inspection by calling the contact on the order. In a purchase that is usually the listing agent, who arranges access on the seller's behalf. In a refinance it is the homeowner.
At the visit the appraiser measures the house and photographs the outside and every room. The home appraisal checklist covers what to have ready, and the full process is in what to expect from a home appraisal.
Does the appraiser know the purchase price?
Yes. For a conventional loan, Fannie Mae requires the lender to give the appraiser a copy of the complete, ratified sales contract and all addenda (Selling Guide B4-1.1-05). The appraiser then analyzes the contract in the report, including any seller concessions, as USPAP and the appraisal form require.
When is the appraisal fee paid?
Lenders collect the appraisal fee either up front, when the appraisal is ordered, or at closing as part of closing costs. Either way it shows up as its own line on the Loan Estimate and the Closing Disclosure.
If the sale falls through after the inspection, the buyer still usually owes the fee. The appraiser has done the work whether or not the loan closes.
Paying for the appraisal also means you get to see it. Under the Equal Credit Opportunity Act, the lender must give you a free copy of any appraisal for a first-lien loan on a home, promptly when it is done or at least three business days before closing, whichever is earlier (Regulation B, 1002.14). How to read an appraisal walks through the report page by page.
Home appraisal cost
There is no national fee schedule for appraisals. The cost depends on location, the size and complexity of the property, the report type and the deadline.
A small, typical house in a busy market costs less to appraise than a large or unusual one with few comparable sales. For a lender appraisal, the fee is set by the lender or its AMC and appears on your Loan Estimate.
Who pays for an appraisal on new construction?
The buyer generally pays, the same as any financed purchase. Builders sometimes offer to cover closing costs if you use their preferred lender, and that credit can cover the appraisal. Check your purchase contract and Loan Estimate to see who is paying.
Do cash buyers need an appraisal?
No lender is involved, so nobody requires one. Cash buyers who want to know they aren't overpaying can hire an appraiser on their own, and they pay that appraiser directly.
Who pays for a private appraisal?
A private appraisal is one ordered without a lender, and the person or firm that hires the appraiser pays for it. That might be an executor or trustee ordering a date of death appraisal, an attorney or spouse ordering a divorce appraisal, or a homeowner preparing a property tax appeal.
You deal with the appraiser directly from quote to final report, and you are the client. That also means you control who receives the report. There are plenty of other reasons to get an appraisal that work the same way.
The short answer
The person who needs the appraisal pays for it. In a financed purchase that is the buyer, in a refinance it is the borrower, and in a private appraisal it is whoever hires the appraiser. Sellers pay only when the contract says so or when they order their own appraisal.
For private appraisals in Marin County and San Francisco, RealVals fees start at $500 for a single-family home or condo and $700 for a 2-4 unit building. Austin Fernald, a California Certified Residential Appraiser, inspects every property himself and sends a free quote within one business day.
