BLS Appraisals, LLC has answers to "Frequently Asked Questions"


	BLS Appraisals, LLC is always more than happy to answer any concerns you might have about appraisals or real estate in Charleston and Berkeley County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would require your services?
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 is done, what assurance is there that the value indicated is accurate?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Berkeley County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?

Describe an appraisal (Return to top)

The appraisal process is an estimation that leads to an opinion of value. This opinion or estimate is arrived at by using a formal process that typically uses the three main "common approaches to value". One of the three is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which concerns concluding a comparison to comparable homes nearby. Being the most commonly used approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a home. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do? (Return to top)

An appraiser provides an impartial and well justified determination of market value, in the support of real estate transactions. Appraisers present their professional conclusions in appraisal reports.

What are the reasons a person would require your services? (Return to top)

There are a lot of reasons to get an appraisal from BLS Appraisals, LLC with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:

To get a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove insurance.
To challenge inflated property taxes.
To handle an estate.
To give you a leg-up when purchasing real estate.
To figure out a reasonable price when selling real estate.
To protect 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 have to deal with being in a lawsuit - an appraisal will help.

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

What is the difference between an appraisal and a home inspection? (Return to top)

The appraiser is not a home inspector and does not do a full home inspection. A third-party home inspector will judge the structure of the property, from the roof to the bottom. The general house inspector's report will include an evaluation of the condition of the home's heating system, 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)? (Return to top)

To be honest, they have nothing in common. The CMA relies on vague trends in the market. Appraisals use comparable sales which are verifiable resources. Also, the appraisal looks at other factors like condition, neighborhood and building prices. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person creating the report is actually the biggest difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, South Carolina licensed professional who bases a career on valuing homes in and around Berkeley County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their outcome.

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

Every report must reflect a credible value opinion and will clearly state 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 appraiser's opinions and conclusions.
Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
What was involved in the process of completing the assignment.

For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, what assurance is there that the value indicated is accurate? (Return to top)

In communicating an appraisal report, each appraiser must make sure of the following:

That the information analysis implemented in the appraisal was appropriate.

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

That appraisal services were not conducted in a careless or negligent fashion.

The final appraisal report was understandable, credible and defensible.

To become a state licensed appraiser, we must fulfill intense education and experience requirements that enable us to formulate an unbiased opinion. In addition, appraisers must stick to a stringent industry code of ethics and observe 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).

(Return to top) Licensing and certification takes classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he/she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who employs appraisers? (Return to top)

Commonly, appraisers are hired by lenders to estimate the value of 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 information used to estimate values in Berkeley County or other areas? (Return to top)

One of the most important activities of an appraiser is to gather data. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is received from a number of places. To look up recently sold homes to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

Why should I hire a licensed appraiser? (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal will help you determine the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. 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. 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? (Return to top)

PMI is the common abbreviation for for Private Mortgage Insurance. It covers the lender in the event a borrower is unable to pay on the loan and the market price of the home is less than what the borrower still owes 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.


	The savings from cancelling your PMI will make up for the price of the appraisal in a matter of months. BLS Appraisals, LLC has years of experience with real estate value trends in Charleston and Berkeley County. Contact us today.

Should I do anything in advance of the appraisal appointment (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. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

A survey or plot map of the property and building (if readily available).
List of personal property to be sold with the building.
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, septic systems and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?" (Return to 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."

Does the appraisal belong to the bank or the consumer? (Return to top)

In most real estate transactions, the appraisal is ordered by the lender. 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 certainly entitled to a copy of the report - 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these scenarios, the appraiser may stipulate 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 use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (Return to top)

The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the most value returned from renovating a home comes in the kitchen. 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%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.