Real Estate Appraisals and Home Sales in Indiana
February 28, 2026
For most Indiana home purchases financed with a mortgage, the lender will order a real estate appraisal before approving the loan. Understanding how the appraisal fits into the transaction helps both buyers and sellers navigate potential complications.
How the Appraisal Fits Into a Transaction
After an offer is accepted, the buyer’s lender orders an appraisal — typically within the first 1–2 weeks of the contract period. The lender selects the appraiser through an appraisal management company (AMC) or their own independent process. The buyer pays for the appraisal at closing or upfront, depending on the lender.
The appraiser inspects the property and researches comparable sales. The final written report is delivered to the lender, who uses it to confirm the property supports the loan amount.
What Happens When the Appraisal Comes in Low
An “appraisal gap” occurs when the appraiser’s opinion of value is below the agreed purchase price. When this happens, the lender will only fund based on the lower appraised value, which means:
- The buyer must bring additional cash to close the gap
- The buyer and seller can renegotiate the price
- The buyer can request a reconsideration of value (ROV)
- The buyer can cancel the contract (if protected by an appraisal contingency)
Most standard purchase contracts in Indiana include an appraisal contingency that allows the buyer to withdraw if the property doesn’t appraise at or above the purchase price.
Requesting a Reconsideration of Value
If you believe the appraisal missed relevant comparable sales or contains errors, you can request a Reconsideration of Value (ROV) through your lender. An effective ROV submission includes:
- Specific comparable sales the appraiser did not consider
- Factual corrections (wrong square footage, missing room count, etc.)
- Market condition data supporting a higher value
The appraiser reviews your submission and either revises the value or explains why the original conclusion stands. ROVs are not guaranteed to change the outcome, but a well-supported submission does occasionally result in a revised value.
Preparing for an Appraisal as a Seller
Sellers can help ensure an accurate appraisal by:
- Providing a list of improvements — year, description, and estimated cost of significant renovations
- Supplying recent comparable sales — especially off-market or new construction data the appraiser may not have found
- Ensuring access — the appraiser needs access to all areas including basement, attic, and outbuildings
- Addressing deferred maintenance — obvious issues (broken windows, damaged flooring, missing fixtures) can affect condition ratings
You cannot provide direct payment or gifts to an appraiser, and doing so constitutes a federal crime.
Appraisals for For-Sale-By-Owner (FSBO) Transactions
Private sellers can order a pre-listing appraisal from any licensed Indiana appraiser to establish an independent, data-supported asking price. This is not required but can help price the home accurately and provide documentation to buyers. Note that a pre-listing appraisal does not substitute for the lender-ordered appraisal.