Who Usually Pays The Appraisal Fee?

In most home purchase transactions, the buyer is the one who pays the appraisal fee, even though the lender orders the appraisal.

Standard Rule: Buyer Pays

For a financed home purchase, the mortgage lender requires an appraisal to confirm the home’s value before approving the loan. Because this appraisal is done for the buyer’s loan, the cost is almost always the buyer’s responsibility.

The appraisal fee is typically paid:

• Upfront when the lender orders it, or
• Included in the buyer’s closing costs at settlement.

Even if the deal falls through or the loan is denied, the buyer usually still owes the appraisal fee because the appraiser has already performed the service.

When the Seller Might Pay

Although the buyer normally pays, the seller can agree to cover the appraisal fee as part of the negotiation. This often happens in:

• A buyer’s market, where sellers offer concessions to attract offers,
• Situations where the appraisal comes in low and the seller wants to keep the deal alive,
• New construction sales, where builders sometimes include appraisal fees as an incentive.

If the seller agrees to pay, it’s usually structured as a seller credit at closing, not a direct payment to the appraiser.

Refinancing: Homeowner Pays

When refinancing a mortgage, the homeowner (not the lender or a third party) pays the appraisal fee. The lender orders the appraisal to verify the current value of the home, but the cost is the borrower’s expense, just like in a purchase.

Who Orders the Appraisal?

The lender (or its appraisal management company) selects and orders the appraiser to avoid conflicts of interest. The buyer doesn’t choose the appraiser or negotiate the fee directly with them; the lender passes the fee to the borrower.

Typical Cost Range

Appraisal fees vary by location, home size, and complexity, but commonly range from about $300 to $900 in the U.S.. The exact amount is shown on the loan estimate and closing disclosure forms.