A recent article in Business Insider which was included in the Apple News Feed is causing some buzz in the appraisal world. It details the controversial role played by Appraisal Management Companies (AMC’s) in the business. It’s worth reading but is now behind a paywall. AMC's have positively contributed to the restoration of appraiser independence since their introduction in 2010 following the passing of the Dodd-Frank Wall Street Reform and Consumer Protection Act, but there are some AMC’s which engage in dubious practices. These include assigning appraisals to the lowest bidder and taking an exorbitant cut of the fee. Settlement Statements generally note an “appraisal fee” but don’t detail how much the appraiser was actually paid and the portion of the fee that went to the AMC. Appraisers should be paid fees that are “reasonable and customary” for their market, and, in my view, a reasonable target for AMC’s is around 20% to 25% of the total fee paid. If this fee is significantly greater than that, there is cause for concern. I could digress as to my experience in the appraisal space prior to 2010 and my experience since. Certainly, lower volume has put pressure on all players in the appraisal industry, but it remains that most of the appraisal fee should go to the appraiser on the ground. The article proposes that the appraisal fee should be broken down in the settlement statement to note the fee that went to the AMC and the fee that went to the actual appraiser. I think this separation would be a good practice and provide greater transparency to the consumer. Contact Comp One Appraisal Services today and put our local expertise to work for you. Based in the Globe Building at Peachtree Dekalb Airport, we are the perfect resource for attorneys, agents, homeowners, and lenders. Thanks for reading! Got an appraisal issue or question? Call my Appraiser On-Call For You Hotline at 404-245-7577.