Who Pays for an Appraisal?

In most cases, the buyer pays for a real estate appraisal. Here’s why:

  1. Mortgage Requirement: Lenders typically require an appraisal to determine the property's value before approving a mortgage. The buyer covers this cost as part of the loan process.

  2. Cost Transparency: Paying for the appraisal upfront ensures that the buyer is aware of the property's value and can make informed decisions.

  3. Negotiation Leverage: If the appraisal comes in lower than the purchase price, the buyer gains leverage to negotiate the price with the seller.

Important Note

Although the buyer pays for the appraisal, the lender owns the appraisal report. Therefore, the buyer must obtain a copy of the appraisal from the lender, not directly from the appraiser.

This differs from a private appraisal, where the client typically owns the report and can request it directly from the appraiser.

Exceptions

In some cases, the seller may pay for an appraisal, especially if it's part of a listing agreement or to resolve disputes over property value. Ultimately, the responsibility for the appraisal cost can vary based on the agreement between the buyer and seller, but it is most commonly borne by the buyer.

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