CAA Real Property Services, Inc. has answers to "Frequently Asked Questions"

CAA Real Property Services, Inc. is always eager to elaborate on any concerns you might have about appraisals or real estate in Greenville and Greenville County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would I require 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's in an appraisal report?
Once the report has been delivered, what assurance is there that the value indicated is trustworthy?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in Greenville County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from the homeowner in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



Describe an appraisal   (Return to top)

An appraisal is an investigation allowing the appraiser to come to an opinion of value. The appraiser will typically use a number of "approaches," typically three, to draw up the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the property, less the depreciation and physical dilapidation, plus the land value. Another of the approaches is the Sales Comparison Approach - which concerns discovering a comparison to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is commonly the most accurate and best indicator of value for a home. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

Describe what an appraiser does   (Return to top)

An appraiser offers a professional, unbiased determination of market value, in the support of real estate transactions. Appraisers summarize their expert analysis in appraisal reports.


Why would I require your services?   (Return to top)

There are a lot of reasons to obtain an appraisal from CAA Real Property Services, Inc. with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To show a homeowner has 30% equity and remove insurance.
  • To challenge inflated property taxes.
  • If you need to settle an estate.
  • To provide you a leg-up when purchasing a home.
  • To figure out a reasonable property value when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more detailed explanation of the appraisal process click here.


How is an appraisal different than a home inspection?   (Return to top)

Home inspectors do not estimate an opinion of value and do not do appraisal reports. A third-party home inspector will inspect the structure of the home, from the top to the bottom. Generally, a home inspection report will discuss the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

To be blunt, it's apples and oranges. The CMA utilizes market trends to generate most of their business. Appraisals use comparable sales which are valid resources. The appraisal report will also contain area and building costs. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is who's creating the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the agent, whose income is tied to the value of the home.

What's in an appraisal report?   (Return to top)

Each report must demonstrate a credible estimate of value and will document the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
  • All 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 included in the activity of completing the job.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report


Once the report has been delivered, what assurance is there that the value indicated is trustworthy?   (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal used a suitable analysis of the information.

  • That substantial errors of omission or commission were not committed individually or collectively.

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

  • The final appraisal report was transparent, legitimate and conclusive.
There are rigorous education and on the job experience requirements that must be satisfied in order to achieve the status of "licensed appraiser" in South Carolina. Plus, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he or she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Return to top)

Typically, appraisers are employed by mortgage lenders to render a value opinion on real estate involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Greenville County or other areas?   (Return to top)

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

General data is collected from a variety of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.


How can a licensed appraiser help me?   (Return to top)

If you're making any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal assists you in setting 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 home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.


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

PMI stands for Private Mortgage Insurance. This supplementary plan takes care of the lender if a borrower doesn't pay on the loan and the value of the home is less than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Did you secure your mortgage with less than 20% down? Contact CAA Real Property Services, Inc. today at (864)244-3285 to see if you can cancel your Private Mortgage Insurance premium.

Does the appraiser need anything from the homeowner in advance?   (Return to top)

We begin with an inspection of the home. 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 amenities. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Records on the latest purchase of the property in the last three years.
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

What is "Market Value?"   (Return to top)

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?   (Return to 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 appraisal - it's usually included 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 scenarios, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.


Which home renovations add the most to the price?   (Return to top)

This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe move. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms were second, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.