Who Pays for the Home Appraisal in Washington?

May 10, 2024
Last updated:
May 10, 2024
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In the state of Washington, home purchases that involve a mortgage loan typically require a home appraisal as well. Banks and mortgage lenders use these appraisals to determine the market value of the home being purchased.

Washington home buyers tend to have a lot of questions about the appraisal process. And that’s understandable, since it partly determines whether or not the transaction moves forward.

Today, we’ll address one of the most frequently asked questions on the subject. Who pays for the home appraisal in Washington, and when does it have to be paid?

The short version: The home buyer usually pays for the appraisal, unless they can negotiate to have the seller cover the cost. Like most things in the real estate world, this is entirely negotiable.

Definition and Purpose of a Home Appraisal

Before we go any further, let’s clarify the definition and purpose of a home appraisal.

Definition: A home appraisal is an evaluation of a property’s value conducted by a licensed professional appraiser. This assessment considers various factors such as the property’s condition, location, size, and comparable (similar) home sales in the area.

In a typical mortgage lending scenario, the bank or mortgage lender often invests more money into the purchase than the buyer does. For example, if a home buyer in Washington makes a 10% down payment, the lender will provide funding to cover the remaining 90%.

Lenders naturally want to ensure that the property they are investing in is worth the amount the buyer has agreed to pay for it. And that’s where the appraisal comes into the picture.

The purpose of a home appraisal is to determine an accurate and fair market value for the property, which is important for buyers, sellers, and lenders in real estate transactions.

In Washington, all types of home loans require an appraisal to determine the property value. This applies to FHA, VA, and conventional mortgage financing. Any time a bank or lender invests money into a home purchase, they will want to know how much that home is actually worth.

The Buyer Usually Pays For It in Washington

In Washington (as in most states across the country), it’s usually the home buyer who pays for the home appraisal. That’s because in a typical Washington State real estate transaction, it’s the home buyer’s mortgage lender that requires the appraisal. So the cost of a home appraisal in Washington State typically falls on the buyer’s shoulders, as opposed to the seller’s.

Here’s how the broader process usually unfolds:

  • A home buyer gets pre-approved for a mortgage loan and begins house hunting.
  • The buyer finds a property they wish to purchase and makes an offer to the seller.
  • The buyer and seller eventually agree on a purchase price and sign a contract.
  • The buyer provides a copy of the purchase agreement to their mortgage lender.
  • The lender will order an appraisal to determine the market value of the home.
  • An appraiser will visit the property and compare it to recent sales in the area.
  • The buyer will pay for the appraisal on the spot, or as part of their closing costs.

You should also know that real estate transactions can vary from one deal to the next. So, your experience might play out differently from what’s described above.

But there shouldn’t be any surprises or unexpected costs during this process. There’s a lot of transparency built into it. When in doubt, just reach out to your loan officer for clarification.

Asking the Seller to Pay It

In some situations, a home buyer might utilize some real estate negotiation strategies to get the seller to cover the appraisal fee. This is often the case in a slower real estate market, where sellers have to go “above and beyond” to attract offers from buyers.

In real estate lingo, this is referred to as a seller concession, because the seller is conceding something of value to the buyer.

But aside from that, it’s usually the buyer’s responsibility to pay for the home appraisal here in Washington. The buyer can pay for the appraisal at the time the service is performed or, in some cases, roll it into the closing costs.

It’s wise to consult your real estate agent before asking the seller to make any concessions. In a hot market, this strategy could work against you by making your offer less attractive to the seller.

Mortgage Refinancing Is a Different Scenario

Everything we covered above relates to a home buying scenario, in particular.

But in a mortgage refinancing situation, the homeowner is the one who pays for the appraisal. That’s because the appraisal benefits the homeowner by allowing them to qualify for a refinance loan.

A home appraisal in Washington is typically required when a person refinances their existing mortgage loan—and for the same reason mentioned above. The purpose here is to determine the current market value of the home, since it will be used as collateral for the new loan (after refinancing).

Lenders usually require a new appraisal when a person refinances their home, even if the homeowner has had one performed in the past. That’s because house values can change over time, justifying the need for an updated assessment.

The bottom line: So, who pays for the home appraisal in Washington? In the Evergreen State, as is the case in most other states, it’s customary for the home buyer to pay for the appraisal since it’s their lender that requires it. You could ask the seller to pay the appraiser’s fee, but you’ll want to take market conditions into account.

Need financing?

Home buying in Washington requires the help from a team of experts, including mortgage specialists. If yo’re thinking of buying a home in Washington, be sure to get pre-approved for a mortgage to start the home buying process off right. At Sammamish Mortgage, we can guide you through the process. Reach out to Sammamish Mortgage today!

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