When purchasing a home; who pays for the appraisal?
When purchasing a home, it is common practice for the buyer to pay for the appraisal. The appraisal is an important part of the home buying process as it determines the fair market value of the property. The appraisal provides assurance to the lender that the property is worth the amount of the loan they are providing to the buyer.
FAQs
1. What is an appraisal?
An appraisal is an unbiased estimate of the fair market value of a property conducted by a licensed appraiser.
2. How much does an appraisal cost?
The cost of an appraisal can vary depending on the location and size of the property, but it typically ranges from $300 to $500.
3. Why is an appraisal necessary?
An appraisal is necessary to ensure that the lender is not providing more money than the property is worth. It also protects the buyer from overpaying for a property.
4. Can the seller pay for the appraisal?
While it is less common for the seller to pay for the appraisal, it is not unheard of in certain situations. However, traditionally, it is the buyer who covers the cost of the appraisal.
5. Who orders the appraisal?
The buyer’s lender typically orders the appraisal to be conducted by a licensed appraiser.
6. How long does an appraisal take?
The appraisal process usually takes a few days to a week to complete, depending on the availability of the appraiser and the complexity of the property.
7. Can the buyer choose the appraiser?
While the buyer cannot choose the specific appraiser, they can request to use a different appraiser if they believe the assigned appraiser may be biased.
8. What happens if the appraisal comes in lower than the purchase price?
If the appraisal comes in lower than the purchase price, it can affect the buyer’s ability to secure financing for the property. The buyer may need to negotiate with the seller to lower the price or come up with the difference in cash.
9. Can a buyer waive the appraisal?
Waiving the appraisal is not recommended, as it is an essential step in the home buying process to protect both the buyer and the lender.
10. Will the buyer receive a copy of the appraisal?
Yes, the buyer is entitled to receive a copy of the appraisal report. It is essential for the buyer to review the appraisal to ensure that the value of the property aligns with the purchase price.
11. Can the buyer challenge the appraisal?
If the buyer believes that the appraisal is inaccurate, they can challenge it by providing additional information or evidence to support their claim. However, challenging an appraisal can be a complex process.
12. What factors affect the appraisal value of a property?
Several factors can influence the appraisal value of a property, including the location, size, condition, and comparable sales in the area. Upgrades and renovations can also impact the appraisal value.