Appraisal Management Companies (AMCs) are one of the newest additions to the real estate industry. AMCs were created from Dodd-Frank to separate mortgage brokers from appraisers, protect the market from inflated and/or biased values, and facilitate the entire appraisal process. In addition to managing the appraisal process, AMCs must also consider the perspectives and needs of all parties involved, including the borrower, the lender, the appraiser, and the ultimate investor of the loan.
We must consider how important the AMC’s role is in the appraisal process, so let’s talk about what AMCs do and don’t do and exactly what their role is.
What AMCs Don’t Do
AMCs Don’t Control Appraiser Fees
Appraisers set their fees based on demand and their own expertise. AMCs don’t set the fee at all. It is the AMC’s responsibility to track the fees for different products with each appraiser. It is then up to the AMC to present those fees to lenders, brokers, and borrowers. It can be very difficult to track the changing fees of thousands of network appraisers, but it can be even more difficult to explain the reasoning for increased fees in a booming housing market. When their services are in high demand, appraisers deserve higher fees, which get passed along to the AMC, which then get passed along to the borrower.
AMCs Don’t Hire Appraisers
Appraisers work for AMCs as contractors, not employees. As such, there are certain things we can’t control when it comes to how appraisers choose to do their work. This means that, although we work with the appraiser, we’re limited in what we can do if the appraiser doesn’t perform.
We’re also always at the mercy of the information the appraiser gives us, and expectations about turn times are always set by the appraiser. That’s why it’s key that the AMC communicates any important deadlines in the contract to appraisers so they can get the report delivered in time and not negatively affect the loan’s timeline.
AMCs Don’t Influence Value
Even though the AMC manages the appraisal process and ensures a clean report, it cannot influence value in any way. Discussing value is a major compliance issue. If any party in the transaction contacts the appraiser to discuss value or impact value, it could cause big problems, and often requires the appraiser to immediately step down from the assignment.
What AMCs Do
AMCs Manage the Appraisal Process
AMCs have a responsibility to manage the entire appraisal process and make it as smooth as possible for all parties involved in the transaction. At Kairos, we touch the file hundreds of times to make sure that everything is progressing accordingly. Our friendly team is trained to educate borrowers, brokers, and agents, and we are eager to step in whenever needed. Ultimately, our job is to do everything possible to deliver a quality appraisal report within the specified timeframe.
AMCs Provide Excellent Customer Service
Jason and Paul, our founders, had an idea over a decade ago to create an appraisal management company that provides the best customer service around. We communicate with our clients at every step of the process. Our goal is to exceed expectations so that the borrower can move into a new home or collect their refinance money as quickly and effortlessly as possible.
We’re committed to being an AMC that provides the best service and the best communication, leading to great relationships with all of those we work with, from appraisers to borrowers. That’s what our entire business model is built around.
We feel strongly that an important role of the AMC is to help innovate and evolve the appraisal process while keeping appraisers at the forefront of everything we do. If we’re staying the same, we’re not doing everything we can to help borrowers, appraisers, and lenders continue to streamline the process.
We believe that utilizing new technology is the best way to improve processes that help appraisers be more efficient and make more money. That’s why we’ve worked so hard to develop an app that will allow for a virtual appraisal that’s completely controlled by a fully licensed appraiser. This will allow us to continue to do excellent appraisals and keep up with the modern home transaction process.