Or should I reword .. Did They Give Your Sales Price the Cut? This seems to be the big chat at the water cooler in the real estate offices ... Appraisal Management Companies and the questions concerning the appraisal products that come from them.
These companies formed to offer a convenient service to outsource appraisal assignments for lending institutions that did not have the ability to have staff appraisers in the past or financial means to set up a quality pool of appraisers to draw from themselves. With the Round Robin requirement that appraisers must be an independent random selection, these companies have become more prevalent. They offer a financial relief to financial institutions so they won't have to hire staff to oversee this random selection process.
With the utilization of these Appraisal Management Companies has brought criticism that the appraiser quality hired by these firms is lackluster and has contributed to poor quality reports, unwarranted cutting of value of properties and a lack of confidence in the real estate industry regarding the role of these firms.
When an Appraisal Management Company is used, a part of the fee collected for a report is now split between the company and the appraiser they hire. The rule "you get what you pay for" may apply at times with the appraiser assigned to do the appraisal. The more experienced quality appraisers generally decline to accept assignments from these companies as the compensation for their work is just not present. This may leave less experienced appraisers who are not supervised by a review appraiser and my have inferior training.
One of the huge complaints is the appraisers from these firms fail to give effort on the reports and simply slap on the comparables and do not appropriately adjust for points of difference when comparing to the subject. To add further complication another complaint is poor attitude, not willing to consider pertinent facts, reconsideration of value, place an iron curtain up regarding amending their faulted reports, etc.
What does all this mean to the consumer and real estate industry? Frustration and a huge weak link in our industry that has not demonstrated improvement. Needless sales terminated because a poor report reflects an erroneous value or is poorly prepared that the underwriter rejects. Needless expense incurred by the consumer as delays or termination and the expense of reports, inspections, etc. are now down the drain as well as a loss of sale and purchase opportunity and a dream lost.
Is there an answer to this complaint? Not until the quality and professional products of these companies is held to a standard and accountable for performance. Are the Appraisal Management Companies making the cut .. the answer comes from what you have experienced .. Good or the Bad?