Definition
Think of this as a small professional fee—usually $300-600—paid to an independent appraiser who verifies the home is worth what you're paying. Lenders require this to protect their investment in your loan.
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The appraisal fee is part of the lender's due diligence to ensure the loan amount doesn't exceed the property's value. The fee ranges from $300-$600 depending on property type and location. This is a non-negotiable cost for financed purchases.
Pro Tip
Request a copy of the appraisal before closing to verify it supports the purchase price and your loan amount.
Example
The appraisal fee of $450 was included in the buyer's closing costs for the $425,000 home purchase.