Buying a home can be a surprise-filled endeavor when you’re not prepared.

Roseville home buyers entering the market may be surprised to learn about the costs and process for a home appraisal. This is a lender requirement that paves the way for loan approval, however.

Depending on where you live and the size of the property, this cost varies, ranging between $250 to about $500.

Curious to learn more? Here are three things to know about home appraisals:

  • Who takes care of the home appraisal? Home appraisals are conducted by licensed professionals versed in real estate assessments. Those who specialize in home building, contracting and home maintenance are licensed through the state in which the property is located. Their job is to be thorough in producing the home’s value. The value is determined by factoring in the neighborhood, recent sales figures for similar homes, and other numerical information, such as square footage.
  • Who’s on the hook for paying for the appraisal? Short answer: the buyer. Home buyers may have the option to pay upfront, or include the cost of the home appraisal in the closing costs. There may be some confusion about who pays for this because the appraisal is typically ordered by the lender on the buyer’s behalf. The lender, after all, must feel confident in the appraiser’s ability to fairly and accurately report back on the home’s value. This information is used to approve the loan amount, which must be aligned with the home’s value.
  • What if the home appraisal comes under value? Do not panic! It is not uncommon for the appraisal figure to be lower than the agreed sales price. Some options at your disposal to keep the transaction alive are to increase your down payment amount to offset the difference in the loan amount and sales price. Finding a solution, however, doesn’t have to cost you money. A motivated seller may be inclined to accept a revised offer on the home. Due to the nature of appraisals — they’re subjective and depend on various factors — you may decide to dispute the appraisal figure, as well.

The appraisal process is a vital step toward purchasing a home as it determines the fate of your loan and can trigger new negotiations. Remove the element of surprise by reviewing these considerations with your real estate professional as you begin this exciting process of buying a home.