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The Problem with Appraisal Management Companies

For all intents and purposes, Appraisal Management Companies (AMC) are nothing more than a fancy term for the middlemen who work between the lender and your Austin real estate appraisers. And there have been quite a lot in recent years. Their role is essentially to serve as the buffer between the lenders and appraisers, with the goal of producing a USPAP-compliant and unbiased real estate values. For providing this service, AMCs take a sizeable fee. When it comes to commercial real estate appraisals in Austin, this fee can be as high as 30% of the fee you are paying!

But like most things, it’s not completely without a hitch. Here are some of the top complaints about AMCs that you should be aware of…

appraisal-management-companies-problems
Announcing low fee orders

One of the biggest complaints that companies get is how they broadcast orders to numerous appraisers in an effort to canvass for the lowest fee for servicing an order. Because most experienced appraisers will not provide service at such low rates, the result is that a lot less qualified and less experienced appraisers who aren’t at liberty to decline the low-fee jobs take it on and deliver sub par work. This has also resulted in a lot of seasoned real estate appraisers to leave the business because they cannot compete with such low rates when their staff requires a much higher base pay.

The result is of course, a lot of sub par work, leading to more paperwork including increased lender requirements.

Very low quality assurance and quality control

Obviously every AMC will claim to have exceptional quality assurances and quality controls, but this isn’t always the case. In most cases, AMCs follow automated systems that will ask appraisers to answer additional questions, which will then require a review to determine whether they are compliant with lender requirements. This will require adding several days to the process before the AMC can even deliver the report to the lender, making the process more tedious.

Technology fees

AMCs make money by taking a cut from the appraisal. But in addition to this, AMCs will also charge appraisers a “technology fee” which they tack on in order to receive and process a particular order.

Ownership of AMCs

Most AMCs are wholly owned subsidiaries of various banks whose appraisals they process. Following this process flow, the AMC then is able to take a portion of the fee for their appraisals without necessarily getting a neutral middle party between the bank and appraiser, defeating the entire purpose of an appraiser to begin with. Since the middleman is now owned by the bank, the entire process of having an AMC becomes moot; this also potentially raises the cost of the borrower to cover the operating expenses and profit margins of the AMC.

In some cases, AMCs are owned by individuals, but are typically bought out by the banks, leading to these independent companies to dwindle and making it ultimately harder for them to keep up with the bigger, bank-owned institutions.

Lack of regulations for AMCs

Most states have minimal rules and regulations for AMCs. Despite being a significant part of the home buying process, states barely have any rules and guidelines for these organizations to follow.

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Austin neighborhoods we appraise

We provide real estate appraisals and related services to the following cities, towns and communities across the Austin metro area. We cover a large portion of Central Texas - if you don't see your area below, please call to confirm with one of our friendly staff.

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Anderson Mill | Bee Cave | Briafclif | Brushy Creek | Buda | Cedar Park | Creedmoor | Del Valle | Elgin | Georgetown | Hays | Hutto | Jollyville |
Jonestown | Kyle | Lago Vista | Lakeway | Leander | Manor | Mustang Ridge | Pflugerville | Point Venture | Rollingwood | Round Rock |
San Leanna | Shady Hollow | Sunset Valley | Webberville | Wells Branch | West Lake Hills

what customers like you say about our
Austin Property appraisal services

We stand behind our work and our customers have nothing but great things to say. Here are a few examples:

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Real Estate Appraisals Austin
4.8
Based on 45 reviews
Ed came out on short notice to measure a new home I was in the process of purchasing. He was professional and honest in his work. I found him online and it was not through my lender. I wanted an independent appraiser since the lender was connected to my builder. Definitely will use him again if I ever needed to. I was a first time home buyer and he was fair to me and helpful. Thank Ed!
Jennifer Nguyen
Jennifer Nguyen
The realtor that came out was very professional and thorough. I would recommend this service.
Nancy Crow
Nancy Crow
This company is contracted to my mortgage company for market appraisals to remove PMI. They contacted me right away and had the whole thing turned around in less than a week. Appreciate the speed and the quality of the service and would definitely recommend.
Jeanna Kozak
Jeanna Kozak
I was able to schedule an appraisal just two days after contacting the company. Likely this was a fluke, but it worked well for me! Our appraiser was a bit late, but that was the fault of the previous appointment. Once he arrived, he listened to everything we pointed out. Our appraisal was fair for our neighborhood we thought and the report arrived about 8 days after the appointment. We are happy and will recommend Real Estate Appraisals Austin to any others we know.
Leah L
Leah L
We used Real Estate Appraisals Austin and found them to be very professional, accommodating and efficient. Their work product was thorough and very well presented. We would definitely recommend them and would use them again.
Calvin Porter
Calvin Porter
I recently had a rental appraisal of my property. The appraiser showed up on time and did a thorough analysis. The report took a week, but it was very thorough. I am very happy with the appraiser and the report.
Karthik Manamcheri
Karthik Manamcheri
We recently used Real Estate Appraisals Austin to appraise a property we have owned over 15 years and have had multiple offers to sell. Michelle was very helpful and professional in coordinating with our property manager. She responds very quickly to calls or emails. Edward did a thorough appraisal and took the time to call and discuss details. I definitely would recommend this company to anyone considering an appraisal in Austin. The price was very reasonable, I felt, for the value we received.
Lorrie Coles
Lorrie Coles