What Is An AMC? Why Should Homeowners Care?The AMC, or Appraisal Management Company, is an intermediary that connects lenders, such as banks or mortgage companies, with licensed real estate appraisers. When you need a home appraisal for mortgage financing, the lender often uses an AMC to manage the appraisal process. 
When is the AMC not involved in choosing your appraiser? When there is no mortgage financing? Without the bank loan, you can choose your own appraiser. For example, home appraisals for legal preceding such as a divorce, home equity evaluations, estate planning purposes or to challenge a property tax assessment. The Origin of The AMCThe concept of AMCs came about as a response to the need for greater transparency, independence, and regulation in the home appraisal process, particularly in the wake of the housing crisis of 2007-2008. Before the housing crisis, the appraisal process was often criticized for potential conflicts of interest. Lenders and mortgage brokers would sometimes exert pressure on appraisers to deliver valuations that would help close loans, even if those valuations were inflated. When unethical appraisers were involved, this contributed to risky lending practices, inflated home prices, and, ultimately, the housing bubble that burst, leading to a financial crisis. New Regulations, HVCC and AMCsIn response, several regulations were introduced. One of the most significant developments was the introduction of the Home Valuation Code of Conduct (HVCC) in 2009. The HVCC was a set of guidelines designed to ensure the independence of the appraisal process, prohibiting lenders and mortgage brokers from directly selecting or influencing appraisers. The HVCC effectively mandated the use of third-party intermediaries, such as AMCs, to manage the appraisal process. This was to ensure that appraisers could perform their duties without undue influence, thereby improving the accuracy and reliability of home valuations. The use of AMCs aims to separate the lender from the appraiser, ensuring greater objectivity and compliance with federal standards. How AMCs Affect Your Home AppraisalToday, AMCs are a standard part of the real estate appraisal process, especially in mortgage financing. They serve as a buffer between lenders and appraisers, with the aim to maintain the integrity and independence of the appraisal process. Here’s how the AMC is involved with your home appraisal:
Concerns with AMCsWhile AMCs have improved the independence of the appraisal process, they have also introduced some challenges, such as concerns about appraisers' fees and the quality of work. Hidden Cost Of An AppraisalBecause appraisals required for mortgages are forced to go through an AMC, the AMCs control a significant amount of appraisal work. One of the most common concerns is that AMCs often pay appraisers lower fees compared to what they might earn if working directly with lenders. Meanwhile, the lack of transparency around AMC fee structures means the public has little visibility into how their hard-earned money is being diverted away from the actual appraisal work and into the pockets of an intermediary company. Quality of Your AppraisalWhen it comes to priorities for AMCs, you would think finding a quality appraiser with expertise in the area would be important. However, with AMCs paying lower rates for appraisals than what an appraiser might earn by working directly with a lender, there are concerns that lower fees might discourage experienced appraisers from working with AMCs or may lead to rushed or lower-quality appraisals. In fact, AMCs sometimes assign appraisers to areas they are not familiar with, which can affect the accuracy of the appraisal. Geographic competency is crucial because appraisers need to have a deep understanding of local market conditions, trends, and nuances. Assigning appraisers outside of their area of expertise can lead to inaccurate valuations. In addition, AMCs often have strict turnaround time requirements for completing appraisals, which can pressure appraisers to work quickly. While efficiency is important, unrealistic deadlines can lead to rushed appraisals, reducing the thoroughness and accuracy of the valuation. Do Homeowners Get Any Say?Homeowners generally do not get to choose their appraiser, especially when the appraisal is required for mortgage financing. However, there are exceptions when the homeowner can order their own appraisal - like a cash purchase or valuations in the case of divorce, pre-listing a home, or estate settlement. With that said, you can talk with an appraiser who shows up to your home. Any reputable appraiser is glad to address questions and concerns. Although you cannot try to influence the value in an appraisal, you can ask questions before letting an appraiser appraise your home. A few good questions include:
After asking these questions, you probably have a good idea of whether or not you want to work with this appraiser. Keep in mind, even if this is an appraiser your lender has chosen, you can still decline services. If this is the case and you let the appraiser know you are not going through with their appraisal, you’ll need to call the lender (or your real estate agent) and let them know the reason why you declined the appraiser so they can send someone else out to complete the appraisal. However, if you decline services of an appraiser who has already come to your home, there may be a cancellation fee involved. Need An Appraisal In Phoenix AZ?If you are in need of a private appraisal - single family home, age restricted community. condo, golf property, exclusive estate or mobile home - there's nothing we can't handle in the Phoenix area including Scottsdale, Chandler, Gilbert, Mesa, San Tan Valley and surrounding areas.
Give us a call to schedule your appraisal. 
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