Free Appraisal Fee for Home Loans | Metrobank (2024)

FAQs

Why is appraisal fee so high? ›

Why is my appraisal fee so high? Home appraisal fees depend on multiple factors like property's size, property type, the type of loan you're getting, etc. If you are appraising a huge property or opting for a government backed mortgage, your average appraisal fees can be higher.

The amount a buyer pays for an appraisal depends on various factors, including the size of the home, the home's location and the amount of property research that the appraiser ends up doing before they issue a final value report.

This can be a problem because lenders will only lend on the appraised value. If your appraised value is lower than the agreed upon sales price, you'll have to make up the difference in cash, or cancel the deal.

Can the seller back out if the appraised value is too high? The conditions of the offer contract will determine when the buyer and seller can back out of the purchase. However, the seller may simply want to renegotiate if the appraised value comes back significantly higher than the selling price.

One of the ways to save money on appraisal and inspection fees is to negotiate with the lender. Some lenders may waive or reduce these fees as part of their incentives or promotions. You can also shop around and compare different lenders and their fees before you apply for a loan.

Here are a couple things you can do to start negotiations: Check with your lender to see if a second appraisal can be requested. Note: You'll need to submit additional information to show the first appraisal was deficient. Approach the seller about reducing the asking price.

An appraisal costs you between $500 to $750 and is non-refundable money spent. A seller may suspect that you are committed to buying the house, regardless of the outcome, once an appraisal is scheduled. Therefore, we recommend you don't pay for the appraisal too soon while you're negotiating with a seller.

Appraisal fees are typically collected upfront, as the appraiser is paid upon delivery of the appraisal.

Usually, the buyer pays for the appraisal. It's carried out by an FHA-certified appraiser and costs between $300 and $600. During the process, the appraiser will physically inspect the home for: Damage to the roof, foundation, or walls.

Having outdated appliances, plumbing, electrical, and HVAC systems could decrease the value of your property. Dated features in your home's interior could imply that the property has not been well-maintained, which could raise concerns about any underlying issues.

Can I challenge a low appraisal? ›

If you believe that your appraisal is too low, you can challenge the appraisal. Ask your lender for a reconsideration of value (ROV) which is a request to reassess the analysis and conclusions based on additional information that may affect the value of the property.

The appraisal does not have to match the loan amount exactly, but it is a crucial factor considered by lenders to determine the loan-to-value ratio and assess the risk associated with the loan.

Your bank will not issue you a loan for more than the appraised value based solely upon the collateral. The single most important item to understand is that your bank will not give you a loan for your property for more than the appraised value unless the loan is based upon credit rather than collateral.

You may try to negotiate a lower price with the seller, but if a compromise can't be reached – or you can't pay the difference to cover the appraisal gap – the sale could fall through. Also keep in mind that a low appraisal can ultimately affect how much equity you have starting out in your new home.

The above issues might seem concerning but, according to Fannie Mae, “the vast majority of appraisals confirm contract price.” In fact, they come back low less than 10% of the time. So, chances are, you won't run into this issue.

Make up the difference

A seller with a good real estate agent is likely to price their home fairly and as long as the buyer doesn't end up in an intense bidding war that raises the price too high, the appraisal value should come back in line with the sales price.

An appraisal can come in low because the appraiser isn't selecting truly comparable sales for his or her analysis. This can happen if the appraiser doesn't know the local market well.

If a home is appraised to be higher than the asking price, the lender will only issue a mortgage for the appraisal amount. This leaves the borrower to either cover the remaining cost on their own or return to searching for a home with a listed price that matches the appraised value.

As the title says, most purchase appraisals should (and do) come in just above the purchase price.