Do Appraisal Management Companies Sacrifice Quality for Quantity?

amc quality vs quantity

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Accusations geared towards appraisers for allegedly inflating home prices for the sake of the lender started the Home Valuation Code of Contact (HVCC) in 2009. The HVCC was jointly created by members of Freddie Mac, the Federal Housing Finance Agency and the New York State Attorney; though the organization was deemed misguided by the appraisal industry.

Though HVCC’s intentions were well-meaning, one of its most unpopular elements was the requirement that appraisers work with appraisal management companies (AMCs). The issue appraisers had with this change was mostly receiving lower wages due to the AMC taking a cut from the lender.

AMCs, though fairly new, have seen an increase in business during the past few years, not because lenders are required to use them, but because it is more convenient to the lender to receive appraisals through an AMC.

The lender pays the AMC an agreed upon fee and in turn, the AMC gets the lenders property appraised in an agreed upon time then splits the funds from the lender with the appraiser who performed the appraisal. Not only are the appraisers unhappy with working for a lower fee, having to work faster and having a middle man between the lender and themselves; but AMCs with no additional revenue sources can prove a problem for future business.

AMCs, while proposing to offer more appraisals for less money, are looking to get the fastest and cheapest appraisers, sometimes resulting in poor value determination and no geographic competency. Appraisers having no thorough and/or direct working knowledge of the area can drastically affect the quality of the appraisal.

Not all AMCs are created equal, lenders should go beyond the customary “what’s your turn time?” or “how much is the fee?” Appraiser geographic competency is a major consideration as is all-around competency of the appraisal process. PEMCO Limited works with high quality appraisers proven through working with HUD’s strict guidelines. While we can guarantee competitively short turn times, PEMCO Limited will not sacrifice quality for quantity.

If you are an appraiser seeking to work with a company that’s looking out for your best interest while assisting you to provide the best service possible, click here.

Are you a lender looking for high quality appraisals and short turn times? click here.

The Reverse Review. “Appraising: Competency: More Than Just Geographic” 10 April 2014.


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