How Does An Appraisal Management Company Use Quality Control?
Published On September 1, 2020
If you are a real estate agent, you know that a lender may require a property appraisal to determine the value of your client’s property to mitigate risk. You probably know that mortgage lenders always like to ensure that the homes or commercial properties their borrowers are purchasing are worth the sum of money they are considering loaning to the borrowers. While no property appraisal is perfect, keep in mind that some invariably have quality issues that might require review or scrutiny of these appraisals.
This is why many lending institutions, such as banks, use an Appraisal Management Company (AMC), such as AmeriMac Appraisal Management, to manage the appraisal process and maintain quality control. These appraisals also increase oversight and promote transparency.
2008 Housing Market Crash
Since the 2008 real estate crash, the US federal government implemented new laws and regulations to ensure quality appraisals. Did you know that mortgage lenders, such as banks, can no longer directly approach an appraiser? Instead, lenders have to provide effective separation between the originator and the appraiser.
How an Appraisal Management Company Ensures Quality?
Keep in mind that an AMC, such as AmeriMac Appraisal Management, acts as a liaison between a lender, appraiser, and borrower. Note that this is important as it maintains appraiser independence while improving the appraisal’s reliability and quality. Also, it protects the consumer.
An AMC usually enlists a team of qualified and experienced appraisers and other personnel to monitor the process and perform all property appraisals proficiently and successfully. This helps ensure that no quality issues arise later on.Appraisal management companies play a significant role in the quality control process by carefully monitoring the home appraisal process, thoroughly reviewing an order, and assisting in any needed revisions. They deliver a product that is complete and fully compliant.
Home Appraisal Review Guidelines
You should note that since the 2008 real estate debacle, mortgage lenders are under an obligation to review more home appraisals to identify any potential quality issues and make the process more transparent. It is also worth noting that mortgage investors, like the Federal Home Loan Mortgage Corporation, now mandate lenders to conduct frequent and random appraisal quality reviews.
And since Freddie Mac and similar mortgage investors in the US purchase a significant number of residential mortgages from lenders, their comprehensive appraisal review guidelines are essentially mandatory requirements.
Forms and Paperwork
As a real estate agent, you may know that property appraisal is complex. There are different appraisal forms and other paperwork used to appraise different kinds of properties, such as condos and multifamily homes. This is why it is essential to understand which form is applicable for what kind of properties. Professionals who review home appraisals have to talk to the appraisers if any modifications or corrections are required to make the appraisal error-free.
For example, experienced reviewers at AmeriMac Appraisal Management follow up for reports and coordinate appointments with borrowers. An appraisal management company has a pool of qualified and experienced appraisers to provide reliable appraisals. When an appraisal request comes in from a lending institution, the appraisal management company assigns a suitable appraiser to offer an appraisal report for the relevant property.
Also, keep in mind that appraisers do not receive any prior indication of the home value and might not directly communicate with the lender. The appraiser provides an appraisal report in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) guidelines. The AMC can assist if the home appraiser faces any issues or obstacles.
AMCs Evaluate Property Appraisers
Like other professionals, appraisers need the right education, experience, and credentials to competently and reliably appraise a home or commercial property. Keep in mind that state requirements vary, and it often takes a considerable amount of time and effort to complete certification as a property appraiser.
Good appraisal management companies maintain quality by working hard to ensure that all their appraisers are current with their credentials, and they are the most suitable appraisers for a specific assignment.
And that is not all; they maintain performance metrics for property appraisers and consistently assess them to make sure that their appraisers’ panel is full of reliable and quality appraisers. For example, AmeriMac Appraisal Management takes quality control very seriously. The company guarantees that its in-house quality control department manually assesses every home appraisal.
In-house teams comprising licensed and certified appraisers at AMCs review every property appraisal using a multi-step process. First, these companies perform an electronic audit to check all data fields are accurate and complete. Some of these fields are name, address, and zip code. Once the home appraisal passes this electronic audit, quality control representatives at AMCs manually review the appraisal.
They use the lender’s checklist and ensure each property appraisal meets the underwriting guidelines of the client. These companies also issue a report to confirm USPAP compliance.
Appraisal Management Companies are Familiar with the System
There is no doubt that the US’s commercial real estate industry is easily one of the most fast-changing industries, particularly when it comes to changing regulations and rules regarding compliance issues.
The good news is that appraisal management companies have extensive training, experience, and quality control departments to conduct all home appraisals appropriately, and present all the collected data accurately.
When it comes to quality control, a job is never complete if it not done correctly. At AmeriMac Appraisal Management, professionals oversee and pursue the completion of all projects with the utmost efficiency.
Each Appraisal Management Company is Unique
No two AMCs are alike. This is why, when choosing one, it is crucial to consider several factors. The best appraisal management companies provide many appraisal services and offer quick turnaround-times with reliable customer service. AmeriMac Appraisal Management combines all this with the latest technology and various appraisal process innovations to be the strategic partner you can rely on for quicker closings and more reliable and accurate reports.
AmeriMac Appraisal Management has worked with real estate agents, lenders, and appraisers to offer unrivaled third-party appraisal management knowledge and expertise. If you are a real estate agent and want to know the value of your client’s residential or commercial properties, call the trustworthy, experienced, and reliable experts at AmeriMac Appraisal Management today!