The Cost of a Home Appraisal in Indiana

If you’re financing the purchase of a home in Indiana, your lender will typically order an appraisal to determine the property’s current value. You might also need an appraisal if you want to refinance to get a better interest rate or cash out some equity. Or you may be considering selling your Indiana home and want a pre-listing appraisal to assess its value and help determine your asking price.

So, what is the cost of a home appraisal in Indiana?

In this post, we’ll examine what factors influence the cost, what you can expect to pay, and provide helpful tips and guidance from Indiana home appraisal experts.

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What is a home appraisal?

An appraisal is simply a written document indicating a professional’s opinion of the value of your home at a specific time, given market conditions. In order to determine your home’s worth, an appraiser conducts a walk-through inspection of the home and then examines the sale prices of comparable homes in your area. The appraiser then documents the details of the home’s condition and amenities, providing research and reasons for their valuation, using the Uniform Residential Appraisal Report.

How much does a home appraisal cost in Indiana?

The cost of a home appraisal in Indiana will range between $223 and $600. But where might your home fall in this wide estimate?

According to ProMatcher, a website that matches professionals with consumers, its posted statewide cost of a home appraisal in Indiana ranges between $223 and $354. But in Indianapolis, you will typically see appraisal costs come in somewhere between $450 and $600, says Kyle Williams, a top agent who works with nearly 70% more single-family homes than the average Indianapolis agent.

For comparison, estimates for the national average home appraisal fee range from $313 to $600.

• HomeAdvisor/Angi: $313-$421
• Fixr.com: $375-$450
• Thumbtack: $400-$490
• LendingTree: $300 to $500
• 2021 Washington Post report: $500-$600

Let’s look at the variables that can increase or decrease your cost of a home appraisal in Indiana.

What factors influence the cost of a home appraisal in Indiana?

So will your Indiana home appraisal cost $223, or can you expect to pay in the $600 range?

“If it’s a cookie-cutter house that has a lot of comps (comparable homes), appraisers are competitive on the fee,” explains Steve Shockley, senior appraiser and Indiana state vice president of the Appraisal Institute. “But if it’s a unique property that requires more research and time, the fee will be bigger. The cost of an appraisal is related to the scope of the work, based on time invested.”

Here are some factors that can influence the cost of a home appraisal in Indiana:

Urban vs rural

Urban properties tend to be smaller and have more information readily available in the local MLS, which makes them faster and thus cheaper to appraise.

Rural properties tend to be larger with more features and more land, whose value needs to be assessed, and possibly lack multiple comparable properties nearby to make determining value easy. Because of the legwork required for a reasonable appraisal, rural property appraisals often cost more.

Property type

Lakefront multi-family homes cost more to appraise than single-family subdivision houses. The more bedrooms and bathrooms a house has, the more time and money it takes to appraise. Multi-family homes in Indiana often stray from the standard sales comparison approach for determining a home’s value, which adds to the appraisal cost.

Property features

Features like a lake or a pool or a home gym add to the time and cost of appraising a home, as they interfere with the standard sales comparison approach.

Extensive damage

While an appraiser is not a home inspector with a whole toolkit of specialized inspection tools, appraisers are trained to spot visible signs of damage, such as cracks in the walls, ceilings, floors, or foundation.

Unrepaired structural damage will negatively affect your appraisal and can impact the cost of your appraisal as it takes more work for the appraiser to assess the fair value of your home.

Speed

Short deadlines can increase the cost of an appraisal. If you’re trying to work with a tight deadline, you can opt to pay a rush fee.

Shortage of qualified appraisers

If there aren’t enough qualified home appraisers in your area to serve the need for appraisals, you may have to resort to bidding higher in order to ensure your home appraisal is conducted in a time frame that works for you.

Additional factors that influence the cost of a home appraisal in Indiana include how far the appraiser has to drive and how busy the appraiser is, Williams says. “Proximity and size of the house are the two most important factors.”

Shockley points out that FHA loans have additional requirements that can add time, so the cost of the appraisal can be higher.

Weighing these factors above can help you determine if your property will be on the high or low side of Indiana’s estimated home appraisal cost range.

Why is a home appraisal needed?

When a buyer finances the purchase of a home or refinances a mortgage, an appraisal is typically ordered by the lender to establish the value of the property. Data from the appraisal is often used to confirm that the loan-to-value (LTV) ratio meets their underwriting guidelines, according to the Appraisal Institute, the nation’s largest professional association of real estate appraisers.

Lenders want reassurance that the buyer isn’t over-borrowing because the home serves as collateral for the loan if the borrower defaults on the mortgage.

If a buyer pays in cash, it’s up to the buyer whether or not to have the home appraised before closing.

Some sellers opt to order an appraisal of their home before listing, considering it well worth the cost — particularly if the home has unique features, such as solar panels or an accessory dwelling unit (ADU), if it’s an unusual or rural property, or if it’s an inherited property.

How does a home appraisal work? 

Along with an on-site evaluation, a licensed or certified appraiser gathers information and data about the property to determine its value. Some of the information collected includes:

• Zoning
• Hazards, such as FEMA flood zones
• The neighborhood
• Size, age, and condition of the property
• Construction details, such as type of foundation, type of materials used
• Improvements made to the property
• Features, such as swimming pools or an accessory dwelling unit (ADU)

The appraisal must be handled by an independent Appraisal Management Company (AMC), which assigns an appraiser to provide the valuation report.

FHA and VA loans have additional requirements, most of which relate to safety or soundness.

Using that information, market data, and recently sold comparable properties, appraisers then determine your home’s current market value.

What do home appraisers look for in Indiana? 

Appraisers look at a wide variety of attributes, such as:

• Type of neighborhood (urban, suburban, rural)
• Housing trends
• Type of house
• Age of house
• Size of house
• Number of bedrooms/bathrooms
• Materials used in construction
• Home condition – damage, repairs
• Renovations and additions
• Features and amenities (fireplace, pool, outdoor spaces like patios and porches)

Appraisers in the Hoosier state start by taking the purchase price and comps into consideration, Williams says. Next, they’ll look at the number of bedrooms and bathrooms, square footage, and lot size.

In Indiana, appraisers also consider amenities, Shockley says. “Kitchens and baths are important. Even if they don’t cook, people want a big kitchen.” These days, he adds, a two-car garage is “not enough” for Hoosiers.

What increases the appraisal value of a home in Indiana?

As a general rule of thumb, things that can increase the appraisal value of your home include:

• Fresh paint
• New garage door
• Landscaping
• Kitchen or bath update

In Indiana, Shockley says taste and preference can also influence the appraised value. That’s why it’s so important to be aware of the latest trends, and he believes the best person to talk to about trends and what buyers want is an experienced real estate agent. “They hear all the buyer feedback.”

Williams says living space increases the value of an Indiana home, whether that’s a finished basement, finished attic, or outdoor living space. “Lot size increases value,” he says. “More space.” How well that space is appointed also counts, with patios, decks, and fire pits inviting buyers to spend time in that added living space.

Many buyers today are looking for turnkey homes. However, as a buyer, you’re also likely balancing wants and needs with what you can afford. You don’t want a home that’s been over-improved for the neighborhood or price point. Williams says that Indiana buyers are less impressed by updated kitchens and baths, with new tile and appliances, than they are with more living space.

What negatively affects a home appraisal in Indiana?

Typically, these things will have a negative impact on a home appraisal:

• Neglected maintenance
• Poor construction quality
• Damaged roof
• Mold
• Pest infestation
• Water damage/leaks
• Foundation issues or structural damage
• No garage
• No outdoor living space
• Lack of updates
• Busy street
• Zoning issues
• Boundary encroachment
• Renovations not permitted
• Missing or broken smoke detectors
• Exhaust fan venting into the attic
• Overloaded electric panel

“Deferred maintenance can decrease the value of a home,” Shockley states. “Buyers look at the total outflow of cash, including purchase price and repairs.” Big-ticket items like foundation issues, a leaky roof, and old windows can add tens of thousands of dollars to their outlay of cash. They can also raise concerns that other ordinary maintenance hasn’t been done.

Other items that may drag down the appraised value in Indiana are small lots and poor curb appeal.

What will a home appraiser in Indiana ask of me?

When preparing for an appraisal, be flexible with the schedule and make sure the appraiser has access to all parts of the house. Provide a list of recent improvements and upgrades you’ve done to the house.

If you have pets, be sure they’re secured.

Can I get a free home appraisal?

HomeLight is one of several online real estate companies that provide a free home appraisal in the form of an online value estimate tool (known as AVMs or automated valuation models). After receiving details about your property, our Home Value Estimator analyzes millions of real estate transactions to provide a preliminary or ballpark estimate of value in less than two minutes.

Homeowners can also request a comparative market analysis (CMA) from a local real estate agent. A CMA is a tool agents use to calculate the value of a home by evaluating its features, size, location, age, and other details in relation to similar nearby properties that have recently sold. A CMA is primarily used to help set a listing price.

Keep in mind that while an AVM or CMA can provide you with a home value estimate, they aren’t the same thing as a home appraisal performed by a professional appraiser.

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Who pays for a home appraisal?

Who pays for a home appraisal depends on what the appraisal is being used for. When purchasing a home, the buyer typically pays for the appraisal. The fee may be included in the closing costs, or the buyer may have to pay for it directly or through their lender.

Homeowners might pay for an appraisal if they are refinancing, and some sellers will pay for what’s known as a pre-listing appraisal.

Here’s how payment generally works:

Is a seller pre-listing appraisal worth it in Indiana?

A pre-listing appraisal can be especially helpful if sellers have unique or rural properties that have few comps. For the average home with plenty of comps, it may be wiser not to spend the money on an appraisal when a CMA can provide much of the same information.

In fact, Shockley considers — in most cases — paying for an appraisal on the home you’re selling a waste of time and money. According to federal banking regulations, he says, appraisals are only valued when related to a financial transaction. When it comes to a seller getting a pre-listing appraisal, he says, “A bank can’t use it due to perceived bias. If [an appraiser] wasn’t hired by the bank, it’s not real helpful.”

Conversely, Williams says the opinion of a third party can be beneficial when setting the price of a unique property with no comps. He once had a seller whose home had no comps within a half-mile radius, so he hired an appraiser.

“The appraiser came in $50,000 higher than we were going to list [the home] at,” he recalls. The home appraised at $450,000. He listed it at $420,000, showing all potential buyers the appraisal so they could see that if they bought the home, they’d have immediate equity. “By seeing the appraisal [in comparison with the asking price], they felt like they were getting a deal,” he says. Considering that during the pandemic and housing shortage, many buyers were overpaying for homes, seeing that they could have equity upon purchasing this home was a strategic reassurance that encouraged bids.

This tactic resulted in multiple offers that came close to the appraisal. The home sold quickly.

How long does a home appraisal take? 

Appraisals can take a few days or a few weeks to complete. It depends in part on the size and uniqueness of the home and on the current housing market. When mortgage rates drop, as they did in 2021, appraisers may have a backlog of customers wanting appraisals, which results in a busy market that can slow the timeline. A shortage of qualified appraisers can also impact the timeline.

How do you find an appraiser in Indiana? 

In most cases, the lender is the party requiring an appraisal and will hire an appraiser through an appraisal management company (AMC). AMCs provide third-party, professional appraisal contractors who are not affiliated with the lender or borrower.

If you are hiring an appraiser directly, you can find one through the Appraisal Institute, a global organization for home appraisers. It offers a Find an Appraiser tool, which allows for a simple search for an appraiser by ZIP code.

Williams also suggests a Google search. You can also ask friends, colleagues, your lender, or a local real estate agent for a referral.

Conclusion: Ask your Indiana agent about appraisals

An appraisal essentially evaluates a home in comparison with similar homes nearby. Lenders and homeowners use appraisal results to establish the value of a property.

If you’re a buyer, you will likely have to pay for an appraisal if you’re financing the purchase of a home.

If you’re a seller, talk with your real estate agent about whether or not a pre-listing appraisal will benefit your sale. An experienced agent can also advise you on how to put your home in the best light.

If you don’t have an agent, HomeLight can connect you to the top-performing agents in your neighborhood through our Agent Match platform. In less than two minutes, this free tool will analyze more than 27 million transactions and reviews to find the best agent to meet your needs.

Writer Amna Shamim contributed to this story.

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