Working with Lenders Who Self Manage Appraisals


Anyone who has been actively investing in real estate over the last few years and has been working with a traditional lender knows the kind of difficulty surrounding the appraisal process. It really started in 2009 with the new HVCC laws that went into effect to prevent abuses in the industry between lenders and appraisers. While the intention of the law was good, it definitely created a huge ripple in the housing and mortgage markets that has made the work of a real estate investor much more challenging.

One of the effects of this legislation was the creation of a number of large AMCs (Appraisal Management Companies) which help facilitate the separation of lender and appraiser required by HVCC. For most lenders, the convenience of having a third party appraisal management company to handle appraisers was an easy answer to the compliance requirements of the HVCC legislation. However, those in the business quickly figured out that appraisals through these AMC’s were not only more expensive, but also hit or miss.

As an investor, whether you are buying and selling or buying to hold, it is crucial that appraisals come in where expected.  There is nothing worse than spending time and energy to buy a property, renovate it and find a buyer … only to have the deal fall apart (or your profit margins disappear) because an appraiser did a lousy job estimating value.

Interestingly, in the last year or so I have noticed more lenders are popping up with a different business approach to the management of appraisals and HVCC compliance. Many are actually setting up self-managed AMC’s that allow them the flexibility to work off of a much smaller pool of appraisers. In fact, I’ve worked with a few different lenders recently who had as few as 3 to 5 appraisers on their list. While the loan officer doesn’t have the ability to work directly with any of these appraisers (per HVCC), it does make a HUGE difference when you know you have a handful of seasoned and vetted appraisers working on your appraisals. Unlike a large, third party AMC that may have more than 50 appraisers assigned to a geographic area, a smaller self-managed AMC may only pull from a very select group of proven appraisers.

As an investor, having a good relationship with a lender who can provide you with consistent appraisals is absolutely crucial to your business. Whether you are putting permanent financing on a property you plan to keep or selling a retail flip to an end buyer, the appraisal is pivotal to the transaction. One person’s opinion of value can literally change your profit margin by thousands of dollars.  Knowing this, investors would be well-served to work with lenders who can deliver consistent and quality appraisals.

About Author

Ken Corsini

Ken Corsini G+ is the host of the Deal Farm Podcast (on iTunes) and has 10 years of full-time real estate investing experience. His company, Georgia Residential Partners buys and sells an average of 100 deals per year and has helped hundreds of investors around the country make great investments in the Atlanta market. Ken has a business degree from the University of Georgia and a Master Degree in Building Construction from Georgia Tech. He currently resides in Woodstock, Georgia with his wife and 3 children.


  1. Hi Ken I just had a few comments. I work as a real estate appraiser and I am a frequent reader of the biggerpockets blogosphere. You hit the nail on the head on many points. HVCC did change the appraisal profession in many ways. One of the great aspects is that it really helped eradicate pressure from brokers on trying to hit numbers leading to fraud. I also think it helped streamline the appraisal process which used to be ambiguous from appraiser to appraiser.

    But like you said appraisals now tend to hold up transactions. And in a volatile market where time is money, it can be costly to all parties. One area of concern I have with your article is when you stated that, “to have the deal fall apart (or your profit margins disappear) because an appraiser did a lousy job estimating value.” This is probably true for a lot of appraisals nowadays because of the AMC system. The AMC’s charge more per appraisal than the pre HVCC days without the AMC’s. In my area most AMC’s charge the borrower $550-$600 per non-complex appraisal. Of that fee they pay the appraiser $200-$250. Some pay as low as $150 to the appraiser. Furthermore, many AMC’s broadcast appraisal orders and leave them up for bid to the lowest bidder. This means it takes longer to assign the appraisal order and you will likely get someone who is inexperienced or someone who does high volume. Either way its bad news. When you get these types of appraisers you can only imagine the quality of work that results in the finished product. Another thing to add, AMC’s add their own requirements and instructions that can be up to 20-30 pages long. And they differ from lender to lender and AMC to AMC. Which all makes it harder for the appraiser. Good appraisers are leaving the industry because they are making so much less now than they did in the 80’s and 90’s when the average appraisal fee was $300-$350 per. Now they pay us much less, but yet we pay all the overhead, do all the work, and have all the liability. Yet they reap more than 50% of the appraisal cost that is paid by the borrower. You may say that technology and software makes it easier and quicker to complete an appraisal report but that is not the case. Because of scope creep, AMC’s and lenders have added so many more requirements that they want on the report. The appraisal form has become much longer than it was even a few years ago.

    I am all for HVCC and the separation of appraiser and broker communication. I understand a middleman needs to be there so that there is no pressure from either side. But the AMC acting as a middleman has turned into a complete joke since they are literally taking a bigger profit for themselves than the appraiser who is doing 99% of the work and has all the liability. If the AMC’s continue to exist in this fashion the appraisal industry could be completely decimated in a few short years due to the appraisers fleeing towards greener pastures with other occupations.



    I see just the opposite happening. Recently, some mid sized Mortgage Bankers say they can no longer manage their Appraiser Panel and expect loans to be purchased. I wish Investors did understand, however the trend continues.

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