You are under contract, have gone through inspection, objection, and resolution. Your loan is this close to being funded, all that's left is the appraisal. Just as every other inspection has a price, the appraisal doesn't come for free, either. So how much does a home appraisal cost, and can you shop around? Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Home Appraisals: Some Are Easier Than Others According to Casey Fleming, author of The Loan Guide: How to Get the Best Possible Mortgage, “The cost for home appraisals today varies a bit by geographic region, but it has always varied too by the complexity of the assignment. It takes a lot more time to appraise a custom home in the mountains, for instance, than to appraise a tract home in the city.” Of course, this makes perfect sense. It would be very easy to compare a house in a subdivision to another house the exact same size and floor plan, with extremely similar finishes, conveniently located directly across the street. Conversely, it would be much harder to try to figure out the value of a home if there wasn’t another home like it anywhere. The appraisal tells your lender how much the home is worth. The appraiser uses recently sold homes in the immediate area and compares them to the home you are buying in order to come up with a value. If there aren’t any recently sold homes like yours, any recently sold in your area, or both, their job is infinitely more difficult. Some areas of difficulty that are more time consuming for your appraiser may affect the home appraisal cost. An appraisal seems like an easy place to game the system, too. Simply hire someone you know already and make sure the appraisal comes in where you need it to. Related: Home Inspections Can Save You Thousands: Here’s How to Get the Most Out of Yours And before the current regulations went into effect, this is exactly what people did. I know, I did it once, too. Not in an attempt to be underhanded — I just wanted to make sure the appraisal came in where I needed it to, in order to refinance and pull cash out of my flip. My neighbor was an appraiser, and he was a nice guy. I requested that my bank use him; they did, and holy cow, was he generous. It wasn’t my intention (or the end result) to be fraudulent, so it didn’t even occur to me that people were doing this specifically to commit fraud. Cue the economic crash of 2008… The NEW Rules for Home Appraisals Fleming goes on to say, “You should know how appraisals (for lending purposes) work today. In 2008 new regulations put a firewall between mortgage originators (loan officers/any production folks) and the appraisers to make it impossible for stakeholders to influence the appraisal. Today we have to order the appraisal through an online portal via the lender’s website. (Mortgage companies and banks do the same, so it isn’t any different. The originator cannot choose or have any contact with the appraiser.) The lender engages an independent Appraisal Management Company (AMC), which maintains a panel of independent appraisers throughout the country. An appraiser may belong to several, if not dozens, of AMC panels. The loan officer is not even allowed to talk to the appraiser, much less influence them in any way. There are several implications to this organization: The customer may not shop for the appraiser. The appraiser is selected independently and only through this system. There is no cost difference between refinancing and purchase transactions, although, as noted above, there could be differences for complexity or scope. For instance, if you are buying a rental property, the appraiser will be asked to complete a rental survey in addition to the appraisal — obviously, the home appraisal cost will be higher. In our San Francisco Bay area, fees for tract homes are currently running about $500 (range of $475 to $550), but it appears fees are rising.” Dan Bradley, Chief Appraisal Officer for McKissock, an online real estate education platform, agrees with Fleming, saying, “Appraisal fees vary significantly throughout the country and will vary based on the complexity of the property. For example, a refinance appraisal of a standard single-family residence located in a subdivision might be one price, but a refinance appraisal of a property with acreage and outbuildings in the same geographic area will probably cost more, even if both assignments are completed by the same appraiser. The appraisal on the complex property requires lots of additional research, and that research takes time, and therefore it costs more.” Not Everyone Likes the New Regulations Agent Tracey Hampson with Great Santa Clarita Homes isn’t a fan of the new regulations: “Unfortunately with the real estate crash, lenders are now not allowed to ask for a certain appraiser. It’s very unfortunate because often the appraisers are not familiar with the area and bring in values either completely inaccurate or very low.” Related: Why Appraisals Don’t Necessarily Value Homes From an Investor’s Point of View I’ve spoken with other agents who feel the same way. In the past, I’ve recommended that sellers give a cheat sheet of sorts to the appraiser when they get there, including measurements of their home and a list of improvements along with information about the neighborhood, explaining any homes that sold recently for a less-than-market price for reasons not readily apparent. On my street, I know of three houses that sold last year for significantly less than they should have for reasons that would not be known to someone who wasn’t in tune with the latest neighborhood news. Hampson says, “I do meet the appraiser when it’s my listing and always bring comparables. Sometimes they appreciate it.” I would always recommend doing this. If they don’t look at the comparables you bring, you haven’t really lost out on much. But if they do take them into consideration, you can control the process a bit more. Hampson also shared home appraisal cost in her area. “Appraisals run approximately $350 to $400 and are the same regardless of the appraisal company.” Don’t Focus Solely on “Home Appraisal Cost” Over on the other side of the country, Sam Heskel, President of Nadlan Valuation, an appraisal management company in Brooklyn, points out a good way to look at home appraisal cost: “…the cost of an appraisal runs from $400 to $600, consumers should not focus on the cost of the appraisal. Rather, buyers or sellers should be more concerned about the competency of the appraiser. It is not like you are shopping for a bag of potatoes: a home sale or purchase — often the biggest transaction of a person’s life — depends on the appraisal.” Good advice, Sam. Unique Isn’t Always a Good Thing in Real Estate Every single piece of property is 100 percent unique — there will never be two properties that are exactly alike. However, the more unique your property is, the more difficult it will be to value, and the higher the chances are that your appraisal will come in low. Your home appraisal cost will run between $350 and $600 for a home that is easier to appraise — and could run much higher for a unique property. Shopping around for the best price isn’t really an option, so focus on making your home look its best, and ask your agent for a list of favorable comparables to share with the appraiser. How much does home appraisal cost run in your area? Do you have any tips for making the most of our your appraisal? Leave a comment and let’s talk!