When you buy a condo or loft for sale in DTLA, your lender will most likely require a home appraisal – and you have to pay for it. But what is a home appraisal, and how much does it cost?
What is a Home Appraisal?
A home appraisal is an official estimate of a home’s value. It’s typically performed by a licensed appraiser, who then forwards his or her conclusions to your lender.
Related: Appraisals in Real Estate
Why Do You Need an Appraisal?
Your lender will require an appraisal because it’s investing a pretty significant amount of money in your loan. The lender wants to make sure it’s not going to be on the hook for the property – and if it is, it wants to make sure it’s not giving you more money than you reasonably need to purchase the home.
The property is the collateral for the loan. If you default on your payments, the bank will sell the home to someone else – but if it can only sell the home at a fraction of what you owe, the lender loses money.
And lenders aren’t in the business of losing money.
Typically, lenders will only approve a loan for a property that appraises for its full sale price or more – not for one that’s worth less than what you want to pay for it.
How Much Do Home Appraisals Cost?
Your lender will choose the appraiser – you don’t get any say in who it is. Generally, appraisals cost between $300 and $500. This money is usually payable at closing, although some lenders will roll it into your mortgage if you ask them.
Are You Buying a Loft or Condo for Sale in DTLA?
Call us at 213-254-7626 or get in touch with us online to start exploring your options when you want to buy a loft or condo in downtown Los Angeles.
While you’re here, check out our:
- DTLA Arts District lofts for sale
- Historic Core lofts for sale
- DTLA Little Tokyo lofts for sale
- Bunker Hill lofts for sale
- City West lofts for sale
- South Park lofts for sale
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- Financial District lofts for sale