profile picture

Strickland Appraisal & Realty Inc has answers to "Frequently Asked Questions"

Strickland Appraisal & Realty Inc is always prepared to talk to you about any questions you might have about appraisals or real estate in Georgetown County. Contact Strickland Appraisal & Realty Inc today to talk about how we can help solve your valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons a person would need your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, how can I have certainty that the final number is veritable?
How difficult is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Georgetown County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?



What is an appraisal?   (Top)

An appraisal report is an estimation that concludes with an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or valuation. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves discerning what the improvements would cost less physical depreciation, adding the land value. The most common approach in finding the likely sales price of a home is the Sales Comparison Approach which deals with making a comparison to similar homes close by. The Sales Comparison Approach is commonly the most accurate and best indicator of value for a house. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does   (Top)

An appraiser forumlates an unprejudiced and well justified assessment of market value, to be used in making real estate transactions. Appraisers reveal the details of their professional investigation in appraisal reports.


What are the reasons a person would need your services?   (Top)

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for getting an report include:
  • To get a loan.
  • To reduce your property taxes.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To fight inflated property taxes.
  • If you need to settle an estate.
  • To offer you a negotiating tool when purchasing real estate.
  • To figure out an honest property value when listing your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
If you need a more detailed explanation of the appraisal process, please click here.


How is an appraisal different than a home inspection?   (Top)

Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. A third-party home inspector will judge the structure of the property, from the top to the bottom. For the most part, a home inspection report will explain the amenities and the necessities of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Top)

Honestly, they share nothing in common. The CMA uses market trends to conduct most of their business. Appraisals use similar sales which are valid resources. The appraisal report will also include area and building 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.

But the largest differentiator is who's creating the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who has formed their livelihood on valuing properties in and around Georgetown County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Top)

Every appraisal must reflect a believable value opinion and must document the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
  • 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.
  • The scope of work used to complete the job.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the appraisal, how can I have certainty that the final number is veritable?   (Top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal contained an appropriate analysis of the information.

  • Whether individually or collectively, there were no major errors contained in the report, nor any relevant details left out.

  • That appraisal services were delivered in a careful and conscientious fashion.

  • That a credible, defensible appraisal report was communicated.
To become a state licensed appraiser, there are education requirements as well as real world experience that must be attained - all with the objective of being able to render unbiased value opinions. In addition, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification typically translates to many hours of coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he/she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Top)

Most of the time, appraisers are hired by lenders to render a value opinion on a house involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Georgetown County or other areas?   (Top)

One of the most important tasks an appraiser performs is to compile data. Data can be categorized as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a variety of places. To look up recent sales to be used as "comps", an appraiser will typically use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.


What can a full appraisal do for me?   (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. 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. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


What exactly is PMI and how can I get rid of it?   (Top)

PMI is an acronym for Private Mortgage Insurance. This supplemental plan takes care of the lender in case a borrower doesn't pay on the loan and the value of the property is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The savings from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Strickland Appraisal & Realty Inc is in the business of tracking value trends in Murrells Inlet and Georgetown County. Contact us today.

Do you need anything from the homeowner in advance?   (Top)

The first step in most appraisals is the home inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its features. On the home's interior, pick up any clutter and make sure we can access 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.

To help speed things along plus ensure a more accurate report, try if possible to have the following items:
  • A survey or plot map of the property and building (if available).
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Title policy that describes encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

What does "Market Value" mean?   (Top)

In real estate appraising, Market Value (as opposed to Fair 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."



Once complete, who actually owns the appraisal report?   (Top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is entitled to a copy of the report - 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 engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.


Which home renovations add the most to the price?   (Top)

Like all things real estate, this is dependent on a home's location. 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

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 are right up there with kitchens, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.