If you are buying or selling a home in California or considering refinancing your Golden State home, knowing what affects the average cost of a home appraisal will provide insights to help you make the best financial decisions about the property.
In this post, we’ll examine the average cost of a home appraisal in California, what factors influence the cost, and answer all your questions related to the appraisal process.
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Why is a home appraisal needed?
Appraisals are typically needed when applying for a mortgage or refinancing a home loan.
According to the Appraisal Institute, the nation’s largest professional association of real estate appraisers, data from the appraisal report is often used by financial institutions to confirm that the loan-to-value (LTV) ratio meets their underwriting guidelines.
Matthew Welch, a top Long Beach agent who specializes in relocations and helping first-time California buyers, says this process starts once escrow is opened. This is when the paperwork is sent to the buyer’s lender, who orders the appraisal through an appraisal management company (AMC). AMCs provide third-party, professional appraisal contractors who are not affiliated with the lender or borrower.
“It’s done very objectively, so there’s no contact from the real estate agent themselves, either the buyer’s agent or the seller’s agent, as to who is going to be doing that appraisal,” says Welch.
Other reasons most appraisals are ordered include matters related to selling an inherited house and sellers who want a pre-listing appraisal.
What negatively affects a home appraisal in California?
Over-improving a property beyond the improvements made to similar properties in the neighborhood can negatively affect the value of a house, according to Ketcham.
“We do see instances where folks just spend a lot of money adding on or remodeling in the home [which] greatly exceeds the quality, style, and characteristics in the surrounding properties. That is a risk.”
Can a current homeowner get a free home appraisal?
A certified appraisal costs money because a professional appraiser has to physically take the time to tour the home and do the research to complete a comprehensive report. According to Welch, this involves the appraiser doing all the measurements and noting the features of the house, including finding a sufficient number of appropriate nearby comparables.
Outside of an appraisal, you can use free online tools such as HomeLight’s Home Value Estimator (HVE) that can quickly give you a ballpark idea of what your home might be worth. Simply answer a few questions about your home, and our HVE will use recent sales records for other properties in your area and public data to provide a free home value estimate in under two minutes. This type of online estimate is not an appraisal, but it may inform your decision when looking to remodel or if you’re just curious about how much your California home has potentially changed in value.
If you’re a seller, you can also ask your real estate agent for a comparative market analysis (CMA). CMAs are typically used to price homes before listing them and are usually created using similar methods as an appraisal. Many local agents will provide sellers with a CMA for free.
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Who pays for a home appraisal?
Who pays for a home appraisal depends on the reason for the valuation. Here’s a simple layout of who typically covers the costs:
| Purpose of the appraisal | Who generally pays for the appraisal |
| Home purchase | Buyer/borrower |
| Pre-listing determination of value | Owner who is planning to sell |
| Refinance | Homeowner/borrower |
| Settling an estate | Family or estate assets |
If you’re a buyer: Financial institutions who want to know the value of a property on behalf of a buyer for underwriting purposes may pay for the appraisal initially and later add this expense to your closing costs. Or, you may be required to pay the appraisal fee upfront, depending on your lender’s agreement.
If you’re a seller: If desired, you can request a pre-listing appraisal, which sellers usually pay for upfront.
If you are refinancing: The appraisal cost may be paid initially by the lender, and then added to your final transaction costs once the refinancing is approved. Or, you may be required to pay the appraisal fee upfront.
If you’re settling an estate: Typically, the executor or personal representative of the estate is required to determine a home’s market value, either for tax purposes or distributions of property. In some states, a fee appraiser may be appointed by a judge. Ultimately, the family or estate assets will pay the cost of the appraisal.
How long does a home appraisal take?
Depending on the size and scope of a property will determine the time it takes to evaluate it. A standard-size ranch house in a subdivision would generally take 30-40 minutes, according to Ketcham. While a larger house with acreage and multiple buildings and features could take two to three hours.
The report itself may take several days or longer to complete, depending on the complexity of the property being evaluated and the comparables required by the lending organization.
How do you find an appraiser in California?
Many resources are available for finding licensed appraisers in California. Where your property is located will determine what appraisers are available to help you. It’s best to confirm that their credentials are in good standing and they’re able to evaluate homes in your area by researching these professional organizations.
California Bureau of Real Estate Appraisers
Real Estate Appraisers Association
California – National Association of Real Estate Appraisers
Appraisal Institute (Southern California Chapter)
Northern California Chapter of the Appraisal Institute
You can also ask an experienced real estate agent in your market about California appraisers they’ve worked with.
Is a seller’s pre-listing appraisal worth it in California?
According to Welch, since sellers base their listing price on recent comparable sales, in his opinion, most pre-listing appraisals are not as helpful in a shifting market — because the day you do an appraisal will reflect the market price at that time, and if you list your house six months later, the price would likely be completely different. This is especially true if it was a stronger seller’s market when you initially did the pre-listing appraisal.
Welch adds that it’s also an additional expense the seller would pay, which is likely unnecessary because one of the top responsibilities of a real estate agent is to determine your home’s listing price and value using a comparative market analysis (CMA). Although lenders won’t accept a CMA in place of an official third-party appraisal, many professionals consider a well-researched CMA to be an accurate tool to determine a home’s value.
On the other hand, a pre-listing appraisal might be helpful if your property is unique and your real estate agent is having difficulty finding nearby comps for a CMA.
Conclusion: Ask your California agent about appraisals
Home appraisals are required for most real estate financial transactions, so whether you’re planning to sell, buy, or refinance, it’s wise to understand the process, especially if you’re the one paying for it.
If you’re a buyer, you will likely have to pay for an appraisal if you’re financing the purchase of a home. The borrower also pays the appraisal fees when refinancing a loan.
If you’re a seller, talk with your real estate agent about whether or not a pre-listing appraisal will benefit your sale. An experienced agent can also provide you with a CMA and advise you on how to put your home in the best light.
If you don’t have an agent, HomeLight can connect you to the top-performing agents in your California market through our Agent Match platform. In less than two minutes, this free tool will analyze more than 27 million transactions and reviews to find the best agent to meet your needs.
Writer Amna Shamim contributed to this story.
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