Sea Island Appraisal Company has answers to "Frequently Asked Questions"


	Sea Island Appraisal Company is more than happy to answer any concerns you might have about appraisals or real estate in Beaufort and Beaufort County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would a person need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the report has been completed, what guarantee is there that the value conclusion is legitimate?
What are the requirements to be a certified appraiser?
Who hires an appraiser?
Where does Sea Island Appraisal Company get the data used to estimate values in Beaufort County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Define the term "Appraisal" (Go to list of questions)

The procedure of creating an appraisal deals with an evaluation which forms an opinion of value. This opinion or estimate is found by a formal process that commonly utilizes three "common approaches to value". One of the processes is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. Another of the processes is the Sales Comparison Approach - which involves discovering a comparison to other similar nearby properties which have recently sold. Being the most common approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a property. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (Go to list of questions)

An appraiser generates a fair and credible opinion of market value, often in the context of a real estate exchange. Appraisers exhibit their investigation in appraisal reports.

Why would a person need a real estate appraisal? (Go to list of questions)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:

To receive a loan.
If you would like to lower your property tax burden.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To challenge high property taxes.
If you need to settle an estate.
To provide you a negotiating tool when purchasing real estate.
To find an honest price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
If you ever find yourself in a civil case.

If you need more information regarding the appraisal process, please click here.

What is the difference between an appraisal and a home inspection? (Go to list of questions)

The appraiser is not a home inspector and he or she does not do a complete home inspection. An inspection is a third-party evaluation of the livable structure and mechanical systems of a property, from the roof to the foundation. The usual property inspector's report will contain an evaluation of the condition of the home's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (Go to list of questions)

Frankly, it's like comparing broadband and dial-up. The CMA relies on indistinct market trends. An appraisal utilizes comparable sales that can be verified by public record. In addition, the appraisal checks other factors like condition, neighborhood and construction prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's behind the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, state licensed professional who made a career on valuing real estate in and around Beaufort County creates the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home.

What's in an appraisal report? (Go to list of questions)

Every appraisal should indicate a credible estimate of value and should identify the following:

Who engaged the appraiser and other intended users.
The intended use of the report.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Relevant property attributes, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
What was entailed in the activity of completing the job.

For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, what guarantee is there that the value conclusion is legitimate? (Go to list of questions)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis utilized in the appraisal was appropriate.

Whether individually or collectively, there were no significant errors contained in the appraisal, nor any relevant details left out.

That appraisal services were done in a careful and conscientious fashion.

That a solid, substantiated appraisal report was communicated.

To become a state licensed appraiser, there are extensive education requirements as well as real world experience that must be logged - all with the objective of gaining the skills required to provide unbiased value opinions. In addition, appraisers must stick to a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he/she must then complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who hires an appraiser? (Go to list of questions)

Mortgage lenders are an appraiser's most likely client, requesting their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Sea Island Appraisal Company get the data used to estimate values in Beaufort County or other areas? (Go to list of questions)

One of the primary tasks an appraiser engages in is to compile data. Data can be split into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is gathered from a variety of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

What can a full appraisal do for me? (Go to list of questions)

If you're involved in any kind of financial decision and the value of your home matters, you'll want to hire a licensed appraiser. When selling your house, an appraisal helps you set the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Go to list of questions)

PMI is an acronym for Private Mortgage Insurance. This additional policy covers the lender if a borrower defaults on the loan and the value of the home is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	Has your home value appreciated since you first purchased? Contact Sea Island Appraisal Company today at 843-379-6103. You may be able to get rid of your Private Mortgage Insurance premium.

How do I get ready for the appraiser? (Go to list of questions)

We start with an inspection of the property. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:

Written property agreements, such as a maintenance easement for a shared driveway.
List of personal property to be sold with the building.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?" (Go to list of questions)

In real estate appraising, Market Value is commonly defined as:

"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."

Does the appraisal belong to the bank or the consumer? (Go to list of questions)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (Go to list of questions)

The added value of a particular amenity truly depends on the local market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the best ROI from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms weren't far behind, yielding 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.