Appraisal process and cost when you are buying a home
When you buy a home and you are financing it, the bank, will always demand an appraisal to be made of the property in order to estimate the right value of their mortgage transaction. It is one of the requirements of the bank and one of the required costs of the mortgage financing process.
It consists of a process where the appraiser compares the local market and defines the actual comparable market value of the subject property.
Appraisals need to be made by certified or licensed appraiser the cost of it is usually between $200 and $700 per appraisal.
The certified appraiser will review the most recent neighborhoods comparable sales and she/he is going to compare it to the subject property, and define the subject properties value. In most cases buyers may ask from the bank for a copy of the appraisal made under their expense.
When you have a market were properties are going up in value, it is very common to see that appraisals come out lower than what the seller and buyers have agreed to as a price. In those cases the buyer may renegotiate with the bank, renegotiate the price with the seller, or step out of the transaction due to the impossibility of getting the appropriate financing set in place.