My husband is an real estate appraiser and for all of those not in the real estate industry this post may not make a lot of sense. Back in the boom years of real estate 2005, 2006, real estate appraisers were largely blamed for giving high valuations to properties. Also the banks were pressuring the appraisers to come in at a high value so they could lend money. There were many other problems that contributed to the housing collapse which in turn created stricter lending regulations which not only have been a headache for the consumer but also for the professionals who work in the real estate industry, most notably the appraiser.
Banks, instead of ordering the appraisal directly through the appraiser, they must now go through an AMC which stands for Appraisal Management Company. See, the banks can no longer talk to the appraiser, as they may be accused of trying to influence them. The AMC is the middle man , they serve as a third party liaison of appraisal management services between clients and appraisers. How does this affect the appraisal business. The AMC take a portion of the appraisal fee, and the appraiser does all the work. It’s like paying a general contractor to hire a painter for you, he takes a cut. Also the experienced appraisers are leaving the field, either because they are retiring or finding jobs that pay more money. There is a shortage of new appraisers coming into the profession, Why? The work load has increased, lenders have stricter requirements, more paperwork to do, which increases turn-around time. Also the requirements to become an appraiser is also quite high. To become a real property appraiser, you must first become an Appraiser Trainee. An Appraiser Trainee is subject to direct supervision by an appraiser who is certified in good standing, and may appraise those properties that his or her supervising appraiser is permitted to appraise. The trainee may have to complete 2000 hours of training before he can go off on his own. That is just to become a general appraiser. If you want to go a step higher and become a certified real estate appraiser, like my husband is, it requires even more hours. Appraisers work strictly on commission with no benefits. When I see the amount of work my husband has to do for little pay it makes me crazy. I have to say most of the time he loves his job but now that the housing market is pretty much back on track, we are both hoping the AMC’s go away.
Are AMC’s really needed?
The use of an AMC is not required by any federal or state law.
The use of an AMC does not provide any benefit to the appraiser.
The use of an AMC does not provide any benefit to the consumer.
The use of an AMC has not protected the consumer.
The use of an AMC has failed to protect public trust.
The use of an AMC has increased the cost of the appraisal to the consumer.
The use of an AMC has decreased the income of the appraiser, thereby harming local economies.
The use of an AMC has increased the turn time for the delivery of the appraisal.
AMCs operate on a fast and cheap model which has deteriorated the quality of appraisals.
AMCs have caused undue stress on the appraiser by demanding constant updates.
AMCs hire unqualified employees that lack comprehension of the appraisal process.
AMCs have caused a great number of experienced appraisers to discontinue completing appraisals for financial lending purposes.
AMCs have failed to provide any benefit to the appraisal profession, the financial industry, or to the consumer.
If you are looking to get a home value on your home or a pre-listing appraisal, I just happen to know a really good appraiser!
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