Who Pays the Appraisal Fee?

Who pays for a purchase appraisal?

A lender may require and arrange an appraisal for a financed purchase. The borrower often pays, but loan terms and agreed credits affect who bears the cost. Ask whether an appraisal is required and how the charge is handled.

The appraisal fee may be paid:

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

Ask when the fee becomes payable and what happens if the purchase or loan does not go ahead. The appraisal work may already have been completed even if the transaction does not close.

When the seller contributes

A seller may agree to contribute to the fee as part of the negotiation. Examples include:

• 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.

A seller contribution may be handled as a credit at closing. Ask the lender and closing professional how the agreement applies.

Paying for a refinance appraisal

For a refinance, ask whether an appraisal is required and how it will be ordered. The borrower often pays, but lender credits or other arrangements can affect the final cost. Check the loan documents before proceeding.

Who orders the report?

For a lender-ordered appraisal, the lender or its appraisal management company commonly selects and engages the appraiser. Ask the lender about its process before ordering a private report. For an estate or divorce, the person engaging the appraiser can discuss scope and fee directly. Agree who pays and who may use the report before work begins.

Confirm the actual fee

The charge depends on the property, location and assignment. For a mortgage, ask the lender about the amount and where it appears in the loan documents. For a private appraisal, request a written scope and fee directly before proceeding.

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Before paying a fee

For a mortgage, ask the lender how the appraisal will be ordered and where the charge appears in your loan documents. For a private assignment, confirm who will engage and pay the appraiser, who may use the report and what the fee covers.