Massachusetts Home Buyer Guide

When you buy a single-family home or condominium in Massachusetts your mortgage lender will want to know whether the home you are buying is worth the amount of money you have agreed to pay the seller.

The lender needs to evaluate the house to discover anything that might negatively or positively impact the home's fair market value. To determine a home's value, lenders require a real estate appraisal, sometimes referred to as a home appraisal, for all borrowers.

Federal banking regulations require that the lender order the appraisal. The regulations are a result of the savings and loan scandals in the late 1980s. Federal law entitles you to receive a copy of the completed appraisal from your lender.

Most lenders will collect the cost of the appraisal from the homebuyer up front. Even if the appraiser's fee isn't collected from you before hand, the cost will be passed on to you as a closing cost for most loan programs. There are loan programs that do not have any closing costs, but the vast majority of those programs are used by individuals who are refinancing an existing loan. Most purchase loans require the borrower to pay closing costs, including the cost of the appraisal. The details of the closing costs will be contained in the Closing Disclosure.  

Appraisals typically cost between $375 and $500, but appraisers will charge additional fees, if they need to make multiple visits to the property for any reason. Lenders must disclose appraisal and other fees in the Loan Estimate, which is a three-page form that potential borrowers receive after applying for a mortgage.

An appraisal is not a home inspection.