A new entity has surfaced in the real estate industry......Appraisal Management Companies....also know as AMC's. What are they, are they necessary and are lenders/clients required to use them?
Lenders are not required to use AMCs. Lenders must ensure that appraisers are engaged independently and not unduly influenced. As a result, many lenders use Appraisal Management Companies (AMCs) to fulfill that role. Risk practices vary from lender to lender, so AMCs must adjust to the reporting requirements of each lender client.
The AMC is providing a service as an agent for the lender. Lenders are mandated by federal legislation to maintain real estate appraisal programs that independently engage appraisers for federally related transactions. Many l enders use Appraisal Management Companies (AMCs) to fulfill that role.
Real estate agents are encouraged to provide appraisers information such as recent sales that are similar to the property being appraised, plat surveys, inspection results, and details about the neighborhood, such as schools and shopping options. Real estate agents should also enter as much information as possible into an MLS listing including multiple interior photos. Some MLSs allow energy efficiency details and certifications to be added to the listing information as well.
In theory AMCs should develop screening and on-going assessment processes and benchmarks to measure and track performance in order to monitor an appraiser’s eligibility for continued appraisal assignments. However, in reality, a lot of AMCs just look for the "cheapest and fastest" service available.