Copyright

Indiana Real Estate Appraisal: Guidelines, Requirements & Oversight

Instructor: Traci Cull
There are state guidelines for property appraisers as well as educational requirements and federal oversight laws. This lesson will cover all three of those concepts.

Appraisal Standards

Beth wants to sell her house but has no idea what it's worth. She called Bob the appraiser to help her out. An appraisal is a process whereby an appraiser develops an opinion of value for a particular residential or commercial property. Standards for appraisals are set forth in the Uniform Standards of Professional Appraisal Practice (USPAP), which sets forth the procedures to be followed and the ethical rules that apply.

There are many reasons a person may request to have a property appraisal done, and wanting to sell your house is one of them. Beth asks Bob what the process entails and how she can get a really good idea of what her house's value is.

Another reason for an appraisal may be to change the type of ownership in the property or if there is a possible property contract dispute. Issues of eminent domain are another reason, as are valuations for gift tax purposes. Finally, if there is a forced sale on the horizon, or a construction/renovation project is on the table, an appraisal will be very helpful to prove if those things are even feasible.

Appraisals can also be done from the financing side of things. A lender may request a property appraisal be done so they will know how much a property is worth and how much they are able to lend based on that value.

Appraisal Reports

The USPAP sets forth the requirements for the appraisal reports. Bob will have to use these requirements when he is performing Beth's property appraisal. The reports must be in one of three different formats.

  1. A self-contained report, which is a complete report with all the appropriate information contained within itself without many outside references.
  2. A summary report, which summarizes all the data used in the report.
  3. A restricted-use report, which only states the conclusions of the appraisal. This type of report is used when the client is the sole user of the appraisal.

All appraisal reports should include the following:

  • The intended use of the appraisal
  • The identity of the client and any other users
  • The real estate that is being appraised
  • The date of the appraisal
  • The valuation methods used
  • All information that was used in creating the appraisal

All appraisals must also contain a certification that states that it was conducted in an objective and unbiased manner. Bob must sign the certification for it to be valid.

Educational Requirements

There are different educational requirements for different types of appraisers in Indiana. To be an Indiana certified residential real estate appraiser (limited to $250,000 on properties), one must be 18 years or older, submit to a background check and fingerprints, have a minimum of a bachelor's degree, 200 hours of qualifying appraisal specific education courses, and 2500 hours of experience in at least 24 months.

To be an Indiana certified general appraiser (no value limit on appraisals), one needs the same requirements as a residential real estate appraiser, and in addition, another 500 hours of experience, for a total of 3000 hours in at least 30 months. Two thousand of the 3000 must be in general appraisal work. This level needs 300 hours of qualifying appraisal specific education courses as well.

Both levels of appraisers will need 15 hours of the Uniform Standards of Professional Appraisal Practice and to pass their appraiser exam before becoming certified.

Beth thinks her house is worth approximately 300,000 so she will have to tell that to Bob up front to make sure he has the correct certification. Bob is in fact an Indiana certified general appraiser and therefore is able to do appraisals of any value. If he were an Indiana certified residential real estate appraiser, he would be limited to values up to 250,000 and would not be able to complete Beth's appraisal. This would be a very good thing for Bob to ask in the very beginning.

To unlock this lesson you must be a Study.com Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use Study.com

Become a Study.com member and start learning now.
Become a Member  Back
What teachers are saying about Study.com
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account
Support