3

I understand the lender chooses who performs their appraisal and I cannot shop around for this, but I want to know that they aren't inflating the charge.

  1. Is this reasonable?

  2. How should I word the request for the appraisal company's invoice?

  • I think 1+2 are reasonably one question; the rest (about switching from FHA to conventional) are either one or two additional questions. – Joe Sep 30 '16 at 21:17
  • 2
    Jess, check out this on appraisals: QL.com: Appraisal Process. Also, you should be able to change your closing date. It usually isn't in anyone's interest for you not to close on the house. Probably will be some more extensive answers below though. Good luck and enjoy your new home! – Ross Sep 30 '16 at 21:19
  • Noob- should i just edit the other parts out and into a new question, same sub? – Jess Sep 30 '16 at 21:29
  • @Jess That would be best, yes. – Joe Sep 30 '16 at 21:45
4

You can't shop around for the appraisal, but you do have a right to know what the appraisal costs before you go into the loan (before you take any step which would cost you money). That will be listed on your "Good Faith Estimate" (GFE) that you will receive prior to anything being done.

The amount actually charged by the appraisal company may not vary by more than 10% from what is on the GFE. So you will know what it will cost going in, and you are welcome to shop based on this cost - i.e., call different mortgage companies and ask what their appraisals cost for your kind of property. In general appraisals for a particular kind/size of property are fixed cost for any given appraiser, so the mortgage company should be able to quickly tell you.

Another thing you should consider is calling around and finding out what appraisers charge. Find a few that are used by other mortgage agencies in your area - it shouldn't be hard to find that information; if nothing else, call the major banks in your city and ask them who they use for appraisals. Then ask what they charge. There will be some variation, so don't be shocked if they're a bit under what you pay, but they should be within 10-20%.

Finally, you can look up average costs on several sites. Bankrate lists the average costs for your area (Mississippi, from comments) as $449.

You also are welcome to ask for a copy of the appraisal (in fact you should receive one even without asking, I always have), and that includes the bill. The appraiser should be able to give you all of that. The actual cost will be presented at the closing, and if they actually inflated that cost they would be committing fraud - so it is unlikely that is being inflated assuming you are borrowing from a reputable mortgage agency. But you certainly can ask for the actual invoice, and at least at one closing I was at the invoice was at closing.

As far as using the FHA appraisal, and the other details there, you may want to ask that in another question.

  • My GFE gave a range for the appraisal. My new closing cost illustration says the max listed on the GFE range. – Jess Sep 30 '16 at 21:59
  • Likely they have two companies they use with two different costs - or the cost depends on house square footage or exact location or some other particular that they either don't know precisely when doing the GFE, or (more likely) it's just a standard thing they fill in the blank. My lending officer knew the exact cost when I did my refi, for what it's worth, but I had what I'd call a very good mortgage company. If they're in the range they quoted, they did what they are supposed to - and always assume the high end of ranges! – Joe Sep 30 '16 at 22:01
  • Can I ask, what did it cost, and what region of the country are you in? – Joe Sep 30 '16 at 22:02
  • Yes. I assumed it would be the high end. I read somewhere that lenders have been known to inflate the appraisal cost. – Jess Sep 30 '16 at 22:08
  • MS $450. 3,200sqft home. – Jess Sep 30 '16 at 22:09

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