As part of any standard mortgage refinance, the lender requires a home appraisal. The lender wants to ensure the homeowner has enough equity to make a new loan. The amount of equity a homeowner is required to have for a refinance is usually 20% or more.
The cost for the home appraisal is generally between $500 – 800 to cover the appraiser’s time inspecting the house, taking pictures, drawing a layout, measuring the square footage, and doing a valuation analysis based on comparables and rebuild costs.
My appraiser spent about 40 minutes getting all the information he needed before telling me he’d get back to me in about a week with the results. While he gathered the information, I asked him questions about the health of the real estate market, how busy he was, and what the city records reflected as my home’s official square footage.
He said he was really busy and the market seems to be doing well. He then told me something I was surprised to hear. He said the city has my home recorded at only 1,720 square feet on the 3R report (Report Of Residential Building Record), or at least 200 square feet smaller than its actual square footage.