When reviewing an appraisal, you might have noticed that there is an appraisal management fee in addition to an appraisal fee. But what is the difference between those two fees, and what do they mean?
At AmeriMac Appraisal Management, we pride ourselves on our excellent communication and transparency. We want to help dispel some of the confusion that buyers might have when they go through the appraisal process.
An appraisal management fee is charged when an appraisal management company like AmeriMac oversees the appraisal process. The majority of the time, it is charged separately from the appraisal fee itself. This might lead to some people worrying that they have been charged twice — or that an appraisal management company might be charging an arbitrary fee.
However, these kinds of fees are necessary. Appraisal management fees ensure that appraisal management companies — called AMCs, for short — are compensated for their work during the appraisal process. AMCs play a key role in ensuring the accuracy, fairness, and transparency of an appraisal. We do much more than a single individual appraiser can, and we have many more resources available to us to be sure that the appraisal is determined using the best methods possible. We also keep everyone in compliance throughout the process.
An appraisal management fee pays for, in part, comprehensive oversight of the appraisal process. While independent appraisers undergo rigorous training, appraisal management companies can ensure that training remains relevant while confirming that appraisals are accurate and unbiased. AMCs will also maintain records on appraisers to ensure that they are using the best of the best — individuals who are dedicated to their craft.
Likewise, AMCs track the data that the appraisers collect on property values and features. Maintaining that collection of information helps AMCs stay current on such values while ensuring the accuracy of the appraisals. In essence, we act as a kind of quality control of both appraisals and the appraisers who create them, reviewing each one that is submitted to check for and eliminate any discrepancies.
AMCs function as the point of communication between the buyer, the lender, and the appraiser, acting as both the hub of information and updates as well as verification that all rules and guidelines are being followed. Requirements for appraisals vary by state, so it is important to work with an AMC that has the experience to work seamlessly across the nation — like AmeriMac.
Once an appraisal is complete, we double-check that everything has been done according to regulations and that no detail has been overlooked. If necessary, we will verify items we have questions about with the appraiser. Then, we will send the appraisal to the lender.
Since timely appraisals are key in the real estate industry, appraisal management fees also go toward efficient completion of an appraisal. An appraisal management company keeps every step of the process on task. We will check in regularly with both the lender and appraiser to make certain that deadlines are met and communication remains open.
Real estate appraisers are independent entities who work with clients directly — most often lenders. Appraisers examine a property — commercial or residential — and compare its features to other similar properties in order to determine a value for the property. These professionals require ample education and experience to keep their credentials up to date so they may provide the best possible service.
AmeriMac offers streamlined protocols to ensure the quality and consistency of our appraisals. While these companies hire independent appraisers to complete appraisals, AMCs provide oversight and assignments of appraisals based on appraisers’ strengths. For example, AMCs would ensure that an appraiser who only has residential experience would not be assigned to appraise a commercial property. Likewise, appraisers who specialize in property values in a certain neighborhood or town would most likely be assigned to appraise similar properties in that area.
Appraisal management companies work hard to guarantee the credibility of an appraisal. At AmeriMac, we use a system of checks and balances during the process, communicating constantly, and making sure the appraisal is completed effectively and efficiently. AMCs also fulfill the role of being a neutral buffer between lenders and appraisers — a legally necessary responsibility following the housing crisis that led to the U.S. recession.
If you have any other questions about appraisal management fees or any of AmeriMac Appraisal Management’s services, don’t hesitate to reach out to our team of experts.