If you’re buying a Boston downtown condo for sale, one of the (many) things you must check off your list is hiring a professional to do a home appraisal to assess the property’s value. But what if, for whatever reason, the Boston real estate deal falls through—who pays the appraisal fee then?
A home appraisal is a professional assessment of how much a property is worth. Unless you’re paying for your home in cash, it’s a non-negotiable in the process. Most lenders require an appraisal before they’ll grant you a mortgage. Your downtown Boston condo is their collateral, and if you can’t pay your mortgage, they want to make sure they can get back as much of their money as possible. An appraisal also helps protect you from buying an overpriced property.
The appraiser will take an unbiased look at a home, the condition it’s in, any repairs it needs, and other factors, and will also likely compare it to other similar properties in the area before providing an estimate of what they think it’s worth. An appraisal goes deeper than the comps your real estate agent likely gathered and presented to you when you were first considering the property—but not as deep as a home inspection, which you’ll also want to have completed in most cases before the sale is final.
If the appraised value is higher than the cost of the home you want to purchase, good for you! You’re making an investment that’s paying off from the get-go. If, however, the appraised value is lower than the price of the house, then you have a variety of options—including negotiating with the seller, challenging the appraisal, and/or getting a second one. Or, of course, you could walk away from the deal completely.
In most cases, it’s still going to be the buyer.
In most cases, even though the appraisal is for the benefit of the lender and the appraiser is selected by the lender, the fee is paid by the buyer. It may be wrapped up into closing costs, or you may have to pay it upfront. There are some cases, however, in which a seller will offer to pay the appraisal fee to make the deal more attractive.
Yes, it’s a bummer paying for an appraisal. However, In the grand scheme of things, it’s a small price to pay when it comes to finding the right Boston downtown condo for sale at the right price.