If you’re buying, selling, or refinancing a home in Indiana, understanding the appraisal process is key to a successful transaction. Home appraisals help determine the fair market value of a property and protect both buyers and lenders from overpaying.
In this step-by-step guide, we’ll walk you through everything on how do home appraisals work in Indiana, from scheduling to reviewing the final report.
1. Scheduling the Appraisal
Once a purchase agreement is signed or a refinance application is underway, the lender will initiate the appraisal process by ordering it through a third-party Appraisal Management Company (AMC). This ensures the appraiser remains neutral and independent from everyone involved in the transaction. Factors that can affect a home appraisal include the home’s location, condition, upgrades, and nearby comparable sales
In most cases, the appraiser will contact the homeowner, seller, or their real estate agent to schedule a convenient time for the site visit. This typically happens within a few days after being assigned the case. The goal is to arrange a time when the home can be accessed easily and inspected thoroughly—this is especially important if the property is tenant-occupied or vacant.
In Indiana, appraisers are licensed professionals regulated by the state, and they follow guidelines set by the Uniform Standards of Professional Appraisal Practice (USPAP). Once scheduled, homeowners usually have 2–5 days to prepare for the visit.
2. Preparing for the Appraisal
Think of this part like prepping your home for a very important guest. While appraisers are focused on objective factors—like square footage, layout, and recent sales—they’ll also note the home’s overall condition and presentation, which can subtly influence the final value.
Here are a few smart steps homeowners can take to prep:
- Clean up the interior and exterior: A tidy home looks well-maintained and cared for.
- Complete small repairs: Fix leaky faucets, squeaky doors, or cracked tiles.
- List your upgrades: Document any major improvements like a new roof, updated HVAC system, bathroom remodel, or energy-efficient appliances. If possible, show receipts or dates of upgrades.
- Mow the lawn and tidy landscaping: Curb appeal does matter, especially for first impressions.
- Ensure full access: The appraiser needs to see every room, including the attic, basement, garage, and any outbuildings.
Pro tip: You don’t have to stage your home like it’s for sale—but neatness helps create a positive impression that your home has been well cared for.
3. The Appraisal Visit
The on-site appraisal typically takes about 30 minutes to an hour, depending on the size and complexity of the home. During the visit, the appraiser will do a full walk-through, taking detailed notes and photos of both the interior and exterior.
Unlike the MLS, how home buying companies determine the value of your home involves proprietary algorithms or experienced agents who may take a broader, more flexible view on valuation, including things like the urgency of the sale or buyer demand.
Here’s what they’re looking for:
- Basic home information: Square footage, number of bedrooms and bathrooms, layout.
- Condition and materials: Flooring, countertops, windows, plumbing, and electrical systems.
- Upgrades and additions: Renovations, extensions, finished basements or attics.
- Structural integrity and safety features: Roof condition, foundation, smoke detectors, handrails.
- Exterior and lot: Landscaping, fencing, driveway, garage, patios, porches.
The appraiser is not a home inspector—they won’t assess the home for code violations—but they will make note of anything that affects livability or market value.
They’ll also take photos of every room and the exterior for their report. These images help support the value they assign later and are included in the final appraisal document sent to the lender.
While homeowners can stay during the visit, it’s best to give the appraiser space and only answer questions when asked. Being polite, professional, and prepared goes a long way.
4. Research and Report Preparation
After the appraiser completes the home visit, the next step is compiling a detailed and data-backed appraisal report. The appraiser will analyze comparable sales (comps) in your area to estimate your home’s value. Can appraisals affect the selling price on a house in Indiana? Absolutely. A low appraisal can cause the sale price to be renegotiated or the deal to fall through, especially if the seller is unwilling to lower the price to match the appraised value.
The appraiser will:
- Analyze comparable sales (comps): These are similar homes in your area that have sold recently—ideally within the past 3 to 6 months and within a mile or two of the subject property.
- Adjust for differences: If your home has a finished basement and a comp does not, or if a comp has a larger garage, the appraiser will adjust values to account for those differences.
- Use valuation methods: Most commonly, they apply the Sales Comparison Approach, though for new construction or investment properties, they may use the Cost Approach or Income Approach.
The final report is a multi-page document including:
- Property description and condition
- Market trends and neighborhood overview
- Details and analysis of the comps
- Photographs of the subject property and comps
- Final appraised value
This report is then submitted to the lender, who uses it to inform the next steps in your mortgage or refinancing process.
5. Reviewing the Appraisal Report
Once the appraisal is complete, you—or your agent or lender—will usually receive a copy of the report. This is your chance to review the findings and ensure everything aligns with what you know about your home. 5 reasons home sales fall through in Indiana and what you can do about It include a low appraisal, the buyer’s financing falling through, issues found in the home inspection, a delay in paperwork, and a reluctant seller refusing to adjust the price.
If you believe something’s incorrect or undervalued, you can request a reconsideration of value (ROV) through your lender. You may need to provide better comps, missing upgrades, or other relevant documentation.
6. Loan Decision
With the appraisal report in hand, the lender now decides whether to move forward with your loan or refinance based on the appraised value.
Here’s what can happen:
- If the appraisal meets or exceeds the offer/loan amount: Great news! The lender will approve the loan, and the transaction continues on schedule.
- If the appraisal is lower than expected: You may have to renegotiate the sale price, pay the difference out of pocket, or, in some cases, cancel the transaction. For refinances, a low appraisal might mean you qualify for a smaller loan or different terms.
- If it’s higher than the offer price: Congratulations! That means you’re buying with built-in equity, which is a win for you.
In all cases, the appraisal is a key factor in the final loan decision—it protects both you and the lender from over-investing in a property that may not hold its value.
Conclusion
Navigating a home appraisal can seem daunting, but with the right knowledge and preparation, it’s just another step toward achieving your real estate goals. Whether you’re a buyer, seller, or homeowner refinancing, understanding how appraisals work in Indiana ensures that you’re well-equipped for a smooth transaction.
If you encounter challenges, remember that it’s always possible to review the report, dispute discrepancies, or explore alternative options to move forward with confidence.
Frequently Asked Questions (FAQ)
1. How long does a home appraisal take in Indiana?
The on-site appraisal usually takes 30 minutes to an hour. However, the full process—from scheduling to receiving the final report—can take 3 to 7 business days, depending on the appraiser’s workload and property complexity.
2. Who pays for the appraisal?
In most cases, the buyer or homeowner (if refinancing) pays for the appraisal. The cost typically ranges from $300 to $500 depending on the property’s size, location, and complexity. However, in some cases, the seller may agree to cover the cost as part of the negotiation process. It’s always important to clarify who is responsible for this fee early in the process.
3. What if the appraisal comes in lower than expected?
If the value is below the offer or loan amount, options include renegotiating the price, covering the difference in cash, or disputing the appraisal. In a refinance, your loan amount may be adjusted, or the loan may not be approved at all.
4. Can I challenge an appraisal?
Yes, you can request a Reconsideration of Value (ROV) through your lender. You’ll need to provide evidence such as better comparable sales, documented improvements, or proof of factual errors in the report.
5. Does a clean home really matter for an appraisal?
While cleanliness doesn’t directly impact your home’s value, a well-maintained and tidy home can influence the appraiser’s perception of condition—which may subtly affect the final value.
6. How is an appraisal different from a home inspection?
An appraisal determines the market value for lending purposes. A home inspection evaluates the home’s physical condition and checks for potential repairs or safety issues—primarily for the buyer’s benefit.
