How much does a pre-listing appraisal cost?

Pre-listing appraisal cost will vary

pre-listing appraisal costI get asked “how much does a pre-listing appraisal cost?” quite a bit. More and more homeowners these days are seriously considering getting an appraisal on their home to help them price it correctly to sell.

There appears to be a change in the mind set of many homeowners from several years ago when the market was appreciating at such a rapid rate. Many sellers would price their home at a very high level due to high demand and most of the time the home would sell fairly quickly, but in today’s market, this is not the case. Competition for buyers is stronger and it is very important to list your home for the correct amount to move it as quickly as possible and to help reduce the likelihood of it not appraising for what it needs to for the mortgage.

In addition to homeowners, real estate agents have been ordering more pre-listing appraisals recently. This is due to changes in the real estate market that make it difficult to pinpoint an accurate listing price. Unique homes or homes in remote locations also make it more difficult to price due to limited comparables.

Because more and more homeowners and agents want to have an appraisal done they are curious about the pre-listing appraisal cost. Generally speaking, an appraisal can cost anywhere from $350.00 to $700. There are various factors that go in to quoting an appraisal assignment so I thought I would share with you what I look at when deciding on the fee. I would like to add that in addition to property specific items there are other considerations that determine the appraisal cost that you might pay if you were going through a lender who uses an Appraisal Management Company (AMC). Let’s first look at property specific information.

Pre-listing appraisal cost factors

Location- The location of the property can affect the difficulty of the assignment. Rural properties typically require more work because the number of comparable sales is different than a suburban home in a subdivision where sales occur more frequently. Obtaining sales information call also be more challenging if private sales make up a large part of the market. Sales that occur through multiple listing offices are easier to track down than private sales because they are easier to verify. The remote location of a property can also result in a higher appraisal cost because there are more job-related expenses.

Size- Large, custom built homes take more time to measure and inspect. Depending on the size of the house, and other property improvements, an inspection can last anywhere from 30 minutes to several hours. A one level 1,200 square foot home on a subdivision size lot will require less work than a large 5,000 square foot custom built house on 10 acres with a guest house or barn.

Complexity- The complexity of a job assignment can sometimes be tied to the size of the home but it also may be the result of the home being unique compared to typical homes. Some examples of this include lakefront homes, homes that are special purpose (horse farm, etc), homes that are built with custom materials or even homes that are affected by their location to positive and negative influences. If a home is located next to a busy interstate this can make the job more difficult because the appraiser will have to find sales of homes with similar features
because of the possible influence on value.

Type of Property- The appraisal cost for different types of properties can vary. This is usually related to the complexity of the assignment. Property types include the following: single family residences, manufactured homes, modular homes, log homes, and multi-family residences (duplexes,etc.). Depending on the real estate market, data may be limited and this could result in additional time and effort.

Non-Property Specific Reasons For a Higher Appraisal Cost- As I mentioned previously there is another reason that a homeowner might pay a higher fee for an appraisal and that would be whenever an Appraisal Management Company (AMC) is involved. This would only occur when they are getting a loan from a bank or mortgage company.

Several years ago government legislation required a third party to get involved so that communication between the loan officer and the appraiser would be reduced. This was supposed to reduce potential pressure on the appraiser by lenders. While it was possible for non-commission employees within the bank or mortgage company to perform this task, many companies outsourced this job to AMC’s, which ended up costing the consumer more money.

The only reason I include this information here is so the homeowner will better understand the difference between what their loan documents say they actually paid for the appraisal and what the appraiser says he got paid. Some AMC’s will add their fee on top of what the appraiser gets and increase the appraisal cost to the homeowner, which can result in the “appraisal” fee increasing by several hundred dollars.

As I said, there are multiple factors that go into quoting an appraisal, so if you would like a specific quote on your own property please give me a call. I would be glad to speak with you about it and answer any questions you have.

If you have any real estate appraisal related questions you can call me at 205.243.9304 or contact me using the form below.

5 Reasons Birmingham sellers need a pre-listing appraisal

Top Reasons Birmingham, AL homeowners should consider a pre-listing appraisal

If I had to pick one part of my appraisal business that has increased over the last several years it would have to be pre-listingpre-appraisal appraisals. A pre-listing appraisal is one performed before putting your home on the market for sale in order to get an accurate asking price. This may seem pretty straight forward, and you may ask “isn’t that what my real estate agent is for”?, but there are some situations where a pre-listing appraisal makes sense and that’s what we’ll be discussing today.

In a perfect world…

There are times when a pre-listing appraisal is not necessary. This situation might occur when you have an agent that has lots of experience selling homes in your area. You will know what the square footage of your home is in order to compare apples to apples since you’ll want to bracket the size to get the most accurate estimate of value. There will be plenty of recent sales and homes that are currently listed for sale.

When coming up with a list price it’s a good idea to compare your home to what has recently sold as well as what is available for sale because potential buyers will be making these same comparisons. After all, why would someone buy your home if they could buy something similar for a lower price?

If the above describes your situation then I’d advise passing on a pre-listing appraisal. Since things are rarely perfect I’d like to describe some situation where it might be wise to seek the expertise of an appraiser.

You have the largest (or smallest) home in the neighborhood

price per square foot not always good value indicatorHaving a home that falls outside of the norm for the neighborhood can present problems when pricing it for sale. The situation I see occur quite often involves pricing your home based on the price per square foot for the area, however there is a problem with this. When looking at houses that are similar with the exception of size, homes that are smaller tend to sell for more per square foot, and those that are larger sell for less.

If you take a price per square foot of the recent sales in the neighborhood and  multiply it by your home’s square footage you will typically over price a larger home and under price a smaller home. This is why price per square foot is not the best way to price your home, especially when dealing with homes that are outside of the norm for the area. An experienced appraiser will choose comparables that bracket the square footage of the house so that you get a more accurate indication of value.

There are no comps nearby

As I mentioned above, in a perfect world there will be nearby recent sales that can be used to help price your home, however what do we do when there are none? A questions I get asked often by agents is “how far away can we go for comps“?. When recent sales are not available within the immediate neighborhood it’s important to know where you can look for comparables.

Hiring an appraiser for a pre-listing appraisal in a situation like this can benefit you because they will know what areas to look in to get sales that are similar to your home. Distance is not always the most important criteria that you should go by. If you used sales in the immediate subdivision that are older they may not reflect what is going on in the real estate market at the current time.

If the market has been getting better since these sales occurred then you’ll probably under price your home. Likewise, if the market has taken a downward turn then you’ll overprice your home which will result in it staying on the market for too long.

You recently made extensive renovations

One mistake that many homeowners make is confusing cost with value. It’s understandable that you would want to recoup a $50,000 investment you recently made in your home but you have to consider what the majority of buyers will pay for these improvements. If buyers will only give you $25,000 for the kitchen renovations you  paid $50,000 for then pricing your home to help cover your costs will not be a smart move.

A better move to make would be to find out what your home might be worth after the improvements are made and then compare that to the actual costs. This is known as a “subject to” appraisal which is not what we’re discussing here but I thought I would mention it so those homeowners considering improvements would know about it.

If you’ve already made extensive improvements then you’ll need to know exactly how the market views them, or put it simpler terms, how much of a return on your investment you’ll get. A current pre-listing appraisal will compare your home with all the recent improvements to other homes that are either in similar condition or that have also had renovations. What you don’t want to do is come up with your list price based only on the cost involved since this will usually overvalue your home.

You can’t sell your home (it’s been on the market a long time)

If your home has been on the market for a long time, and you’re having a hard time selling it, then it could be overpriced. Pricing is at the top of the list when it comes to reasons that a house will not sell.

If a home is priced correctly then the chances of it selling are increased. There are many factors that go into a home being properly priced, some of which I have mentioned here. A pre-listing appraisal will take into consideration your home’s location, appeal, and condition so that it will be priced to the market and be the most competitive.

I’m not a real estate agent but I’ve been around enough that have said that any house will sell if it is priced right. Pricing a home based on comparable sales and listings rather than what you have invested in the home is what should be the main objective of the seller. As I mentioned above it is so easy to let outside factors get involved when selling your home, and if you’ve had your home listed for sale for a while with no luck you may want to ask yourself if this is what you have let happen.

To use as a rebuttal or negotiation tool

Many people don’t consider using a pre-listing appraisal in this way but they should. During the buying process  buyers and sellers go back and forth with offers and counter offers because each is concerned with getting the price that works in their favor. A seller can offer a copy of the report to the potential buyer to ease their mind that the home is worth what they are listing it for, and that the bank financing should not be an issue because it will appraise. Real estate deals fall through all the time because homes don’t appraise for the contract price. This can be avoided with a pre-listing appraisal.

Another use is for a rebuttal. If there is a problem with the mortgage appraisal then the pre-listing appraisal can be used to compare with the bank’s appraisal. Sometimes appraisers do make mistakes and if the bank appraisal has incorrect square footage, which has caused the value to be lower than the contract, then this can be checked against the previous appraisal.

Something else that may be useful if the mortgage appraisal comes up low would be to check the comps that were used. If both appraisals did not use the same comps then the sales that were not used can be provided in a reconsideration of value.


It goes without saying that you should strive to hire the most competent appraiser you can find to do your pre-listing appraisal or everything I’ve written about here doesn’t matter. You want to make sure that they have the education and experience to provide you with the most accurate opinion of value. You should decide, based on your own set of circumstances, whether a pre-listing appraisal is right for you.


Do you have any other questions about how a pre-listing appraisal can benefit you? If so contact me and we’ll talk.