Is the Appraisal Management Company (AMC) Model Broken
August 29, 2019 |
It’s a common subject in appraiser forums, chat rooms, and Facebook pages – a discussion of the pros and cons of working with appraisal management companies (AMC). For those appraisers who have been appraising long enough to have only worked with “direct lenders”, the desire for the “good old days” is strong. Let’s take a look at the complete picture of today’s appraisal world, which may include working with AMC’s.
Tensions run high over the complaints that appraisers have regarding working with AMC’s. They run the gamut from low fee splits to an onslaught of revision requests, and sometimes unreasonable turnaround times.
The quandary is that there are good companies to work with, and others, not so great. Finding a good management company who provides a consistent workflow at fair compensation is a matter of screening the companies.
How can that be done? Here are some ways to research.
- Consider posting a question on a Facebook page.
This is an efficient way to get almost instant feedback on appraisers’ opinions regarding specific companies. Queries from payment timeliness to the nature of “revision requests” are common posts. Check out these Facebook pages:
- I Am a Real Estate Appraiser – The National Coalition
- I Am a Female Real Estate Appraiser
- 100% Real Estate Appraisers
- Real Estate Appraiser Mastermind
- Appraiser Watercooler
- Appraiser Insider
- Appraisal Client Search
Some of these may require you to request permission to “join”, as they try to limit their group to licensed or certified appraisers. Since appraisers are never without opinions, prepare yourself for often volatile comments and arguments!
- Spend some time on the Appraisal Management companies’ websites.
This can be an excellent source of information, as their websites are typically designed more for their lender-clients than for their appraiser vendors. They can also give you a view of their way of operations.
- Ask the Appraisal Management Company to send you their appraisal contract.
Many, but not all, of the management companies have an appraisal contract that will require your signature or buy-in before you receive that first order! These can range from a few pages to many. Watch specifically for indemnification clauses – those statements that ask the appraiser to take responsibility for a myriad of transgressions, some of which may not be your piece of the puzzle. It may require a review by your attorney to determine if you want to move forward with this relationship.
- Ask for detail on their frequency and methods of communication.
This can range from calls, texts, and/or emails regarding new orders, appointments scheduled, inspection completion, and revision requests. There may be an “app” for reporting acceptance of an order, successful scheduling, inspection entrance and exit times, and report upload. With those could come an expectation of reporting these updates as they take place.
The “harassment” of appraisers from companies requesting constant updates is a common reason an appraiser will no longer work with a specific appraisal management company.
- Ask for a sample order.
Orders from Appraisal Management companies range from one page with contact information for scheduling purposes, to over 20 pages with specific detail for all types of appraisal orders.
- Ask for references from appraisers on their panel.
The Appraisal Management company will have an approved list of appraisers on their “panel”. Ask them for a few references from those who commonly work for them.
- Ask for their fee schedule.
Fees are a consideration, but not the only consideration. Volume orders may make up for lower-than-typical fees.
Don’t miss out on what could be a boost to your appraisal workload by assuming that all appraisal management companies are bad. Do your due diligence, so that you can make an educated decision about possible new clients!