All too often the actions of an individual business can shape the perception of an entire industry segment. For example, if someone has a bad experience with a restaurant, they are not likely to visit others within the chain, even though their next experience might be very different. The same can be said for the way most appraisal management companies (AMCs) are thought of by appraisers.
Because of several adverse relationships, the very mention of “AMC” can be associated with negativity – a reputation that is understandable based on some of the stories that are out there. To better understand both sides of the story, we spoke with veteran appraiser Lyle Gallagher about AMCs, appraisers, and what can be done by both parties to foster stronger relationships and a more effective overall appraisal operation.
To start with, it is impossible to ignore the root of the conflict between appraisers and AMCs: Fees. Lyle explained most appraisers consider AMCs to be a middle-man between the appraiser and the lender who, “takes some of the appraiser’s money.”
“Ideally, an AMC would pay a customary and reasonable fee to the appraiser and then charge the lender a separate fee for their services,” said Gallagher. Lyle also advised an AMC, “should not broadcast an assignment and shop for the lowest fee – just order the appraisal from one appraiser who has geographic competency & experience and then monitor turn times,” to avoid conflict. However, these two models are not the standard at all AMCs.
According to Lyle, Dwellworks supports appraisers better than other AMCs by making sure appraiser independence is not compromised, and that a teamwork approach is fostered. “This is crucial because when a positive team approach is created,” said Gallagher, “both the appraisers and lenders can be more efficient with their time.”
Despite the often-opposing nature of the AMC/appraiser relationship, Lyle and most other appraisers, recognize AMCs can offer a great benefit in the mortgage lending process.
“Because lenders and appraisers must follow applicable regulations, it is important (for them) to work with AMCs that can help everyone stay on track,” Gallagher said. “An appraiser’s time is best served doing appraisals, rather than marketing to area lenders, so if real people at an AMC can work with lenders on my behalf, that service has real value.”
Lyle also noted education and communication as key components of any good relationship between AMCs and appraisers. While some of his recommendations included explaining the complexities of USPAP requirements, others outlined something much simpler.
“AMCs can reach out to appraisers and emphasize that their role is to help generate assignments for appraisers through professional marketing and to handle client appraisal concerns. Also, appraisers can be more helpful to AMC staff members with guidance as to how appraisers work and what challenges we face in our profession. In short, the entire operation could benefit from a healthy dose of transparency and teamwork.”
About Lyle Gallagher
Lyle Gallagher of Metroplex Appraisers is a 40-year veteran of the appraisal industry, performing more than 52,000 appraisals in his career. He is a Certified General Appraiser in the Dallas/Fort Worth metro area and was the recipient of Dwellworks’ “2016 Appraiser of the Year” award for North America out of 11,500 appraisers. Among Lyle’s designations, he has earned the SRA designation from the Society of Real Estate Appraisers in 1990, the Manufactured Housing Valuation (MHV) board-certified No. 4109, a Master Senior Appraiser (MSA) designation with the National Association of Master Appraisers, and he is an active member of the National Association of Appraisers.