Whether you’re buying or selling a home, an appraisal is a crucial part of the process. Yet, many people feel that real estate valuations often seem arbitrary, confusing, and overly complicated.
In reality, an appraisal is data-driven and objective: it’s an expert’s opinion of a home’s value based on comparable properties and neighborhood trends. Understanding this helps demystify the process and highlights why it’s important to stop believing these four common home appraisal myths in Indiana. Being informed will empower you to navigate the appraisal stage confidently and avoid unnecessary stress or misunderstandings.
1. The Appraiser Works for and is on the Side of the Buyer
A common misconception is that the appraiser works for the buyer and therefore skews the valuation in the buyer’s favor. While the buyer typically pays for the appraisal, the appraiser is actually hired by—and works for—the lender, who owns the appraisal report.
Regardless of whether the buyer and seller have agreed on a price, the lender is making a significant financial investment and needs an unbiased, accurate valuation. It is a criminal offense for anyone—buyer or seller—to pressure or coerce an appraiser into assigning a specific value. Moreover, appraisers, unlike agents and inspectors, are regulated by government agencies and must adhere to strict ethical and professional standards. This ensures the appraisal process remains fair, transparent, and trustworthy.
2. More Amenities and a Bigger House Mean Higher Valuation
Upgrades, improvements, numerous amenities, and extra square footage don’t automatically guarantee a higher appraisal value. Home appraisals are far more complex than simply adding up features.
The value of a house is primarily based on sales data from similar homes in the same neighborhood. If your home is significantly larger or more upgraded than others nearby, the appraiser may struggle to find comparable sales data to support a higher value. In such cases, the home might be appraised closer to the value of surrounding properties rather than what the owners believe it’s worth. Essentially, appraisers use nearby homes—those that have sold or been appraised on similar lots—as benchmarks to determine a property’s value, regardless of custom features or additions. This approach ensures fairness but can be frustrating for sellers expecting premiums for upgrades.
3. An Appraisal Equals a Home Inspection
Another appraisal story floating around out there is that a home inspection is the same thing as a home appraisal and vice versa. Although both inspectors and appraisers inspect a property to determine its condition, the similarities end there. It’s true that they are both safeguards for the buyer and lender, but they have different purposes.
An inspector’s job, primarily, is to detect any and all problems (and even potential problems) with a home. An appraiser’s job, on the other hand, is to determine the objective market value of the same house. Of course, an appraiser will, just like an inspector, note the condition of wiring, plumbing, roof, and so on, but only as a means to arrive at a valuation for the lender.
4. There’s Nothing You Can Do About a Low Home Appraisal in Indiana
Also, if you are a seller and the home appraisal comes in much lower than you think it should, you do have recourse. Bear in mind that mistakes do happen – mistakes that can severely jeopardize a potential deal.
In such a case, the homeowner, the seller, can – and should – contact the buyer’s lender and request another appraisal. Before you ever reach that stage, though, you should, according to real estate experts, get an appraisal of your own done before the lender’s appraisal takes place. Keep in mind, too, that federal law stipulates that a copy of the appraisal must be supplied to consumers who submit a written request.
If you’re entering the real estate market in Indiana, it’s important to be cautious and not fall for these common home appraisal myths. Understanding the truth behind these stories can save you time, money, and frustration during your buying or selling journey. Being well-informed about the appraisal process will help you make smarter decisions, avoid surprises, and ensure a smoother transaction from start to finish. Don’t let misinformation cloud your judgment—know the facts and approach your real estate experience with confidence and clarity.