Home Appraisal Information for York County, SC

The Appraisal Process In South Carolina

Home Selling and Buying Essentials-The Appraisal

Home appraisals are used to help to establish a property's market value the likely sales price it would bring if offered in an open and competitive real estate market. Appraisals are AN OPINION of value and are used by sellers to establish a listing price and by buyers and mortgage companies to ensure a home's value. In York County, SC many professional appraisers are available. Homeowners may choose to have a fee appraisal before putting the home on the market.

The bank requires an appraisal when you ask to use a home or other real estate as security for a loan, because the lender wants to ensure that the property will sell for at least the amount they are investing in it.

Appraisals should not be confused with comparative market analysis or CMA. As real estate agents, Homes in the Piedmont professionals use CMAs to help home sellers determine a realistic asking price. Because we are experienced Realtors, our CMA often comes very close to an appraisal price. However, a licensed appraiser familiar with the York County SC market including Rock Hill, Tega Cay and Fort Mill South Carolina markets, provides a much more detailed report-and it is the only type of report a bank will use in its lending process. Homes in the Piedmont may recommend an appraisal to a home seller when a property is unique or when recent comparable sales are not available.

About Appraisers and Appraisals

Appraisers are licensed by the state of South Carolina after completing coursework and internship hours that familiarize them with the Rock Hill, Tega Cay and Fort Mill markets. Lenders may use an appraiser on its staff, or contract with an independent appraiser.
The appraiser is an objective third party, someone who has no financial or other connection to any person involved in the transaction.
The property being appraised is called the subject property.
Buyers will probably pay for the appraisal when you apply for your loan and your South Carolina lender will discuss that with you.

What you will see on an Appraisal Report

Appraisals are very detailed reports, but here are a few things they include:

Details about the subject property, along with side-by-side comparisons of three similar properties. These will be properties in the same York County area.
A description and evaluation of the overall real estate market for the particular area of the piedmont in South Carolina.
Statements about issues the appraiser feels are harmful to value or resale, such as poor access to the property.
Notations about seriously flawed characteristics, such as a crumbling foundation.
An estimate of the average sales time for the property.
What type of area the home is in (development, stand alone acreage, etc.).

Residential Appraisal Methods

There are two common appraisal methods used for residential properties:

Sales Comparison Approach

The appraiser estimates a subject property's market value by comparing it to similar properties that have sold in the area. The properties used are called comparables, or comps. No two properties are exactly alike, so the SC appraiser must compare the comps to the subject property and make adjustments to the comps in order to make their features more in-line with the subject property's. The result is a figure that shows what each comp would have sold for if it had the same components as the subject.

Cost Approach

The cost approach is most useful for new properties, where the costs to build are known. The appraiser estimates how much it would cost to replace the structure if it were destroyed.

So What Does the Appraisal Mean to a Buyer?

Buyer approval is accomplished early in the loan process, but final loan commitment usually hinges on a satisfactory appraisal. The bank wants to be sure its investment is covered in case of default on the loan.

If the property appraises lower than the sales price, the loan might be declined, but that isn't the only hurdle it must pass. Other facts on the appraisal can be a problem, too:

The bank will evaluate the estimated time to sell the property as compared to other area homes.
If the appraiser notes that entry to the property is from a private, shared road, the bank may obtain a road maintenance agreement signed by those who use the road, verifying that maintenance is shared by all parties.

Those are just a few examples of negatives that could stall a purchase. The lender evaluates the appraisal carefully before determining whether or not the property qualifies to serve as security for your loan.

It Isn't a Home Inspection!

Appraisers make notations about obvious problems they see, but they are not home inspectors. They do not test appliances, look at the roof, check the chimney or do any other typical home inspection tasks. Never count on an appraisal to help you determine the condition of a home.

Remember-Cost does NOT equal value!

Appraisals are an opinion of market value. What someone paid when purchasing his or her home, the cost of building the home, or the cost of updating a home are NOT considerations in the appraisal process. This is often misunderstood and can be a source of confusion.

If the Appraisal Reveals Problems

Do not panic if the appraisal comes in low, because there may be steps that can be taken. The professionals at Homes in the Piedmont have the experience and expertise to work with you and the other parties involved to resolve issues.

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Elaine Whitton Davis