Appraisal Management Company Drama

Appraisal Management Company Drama

Appraisal Managment CompanyWill your lender use an appraisal management company?
 The appraisal process matters in a home purchase.  If you are using a lender who uses an Appraisal Management Company, you may not get to live in that beautiful home you just put under contract.

Appraisal Management Companies put the appraisal out to bid and the low bidder gets hired to do the appraisal on the house you want to live in.  You don’t have to use much imagination to figure out who is bidding really low on doing appraisals right now.  In my experience the appraisers who bid low:

  • Have kept their license active but have been out of the business for a while.
  • Live far away from the subject property and have little understanding of the dynamics of intown neighborhoods.
  • Live by the motto: Cover your A** (A**  being a donkey type animal found in the barn yard).

Low bid appraisers are not going to appraise the home at market value because they don’t want to ever have to defend their work in front of any authority.  Better to keep the house value low and then have no worries about dealing with any consequences in the future.  And if that wrecks the purchase deal for the buyer – no big deal to the appraiser – they got paid their low bid money up front.

I got this email from a home buyer, purchasing one of my listings, who was doing the home inspection when the appraiser came by:
“I was at the XXXXXX house when the appraiser came to do the appraisal.    He told me “off the record” that the comps he would be using in the neighborhood sold for $210-$225k, but if he goes outside the neighborhood as far as XXXXX, he finds comparables for $300k, so, his range for comparables would be $210,000 to $300,000.  He then told me “As soon as the real estate agents stop lying to sellers about the values of the homes, the sellers will come down to the appraised value” and that the market hasn’t improved much.  What really troubled me is this guy is from XXXXXXXX County so he doesn’t know the area, and the seller’s agent came over because the appraiser didn’t have a lock box to get in so “he would try to get down there” while I was at the house with the inspector.  He didn’t sound optimistic about the value, but he did say he’d have the appraisal submitted tomorrow.  I really hope I don’t get another $32k difference from what I offered and the appraiser’s opinion, which according to this guy, he’s the expert and his opinion is all that matters.”

The home buyer copied me on the email she sent to the lender because she was so angry with the comments the appraiser made while in the house taking measurements.

I also received a newslettter from Shelter Mortgage this morning and it outlines why you need to look at more than interest rates when picking a lender:

“We always use only the very best local appraisers that work in each county. Most importantly, we don’t use Appraisal Management Companies (AMC’s)! Be leery of the companies that do. [Shelter] is the control we keep of the process from start to finish. We do everything in-house which enables us to prioritize files and get approvals, appraisals, and closings done on time! 

Expect our HUD-1’s to be available the day before closing because our closing department sends out closing instructions on average two days before closing. We don’t wait for every condition to be cleared but are proactive and our focus is to get the instructions out and the Settlement Statement to you early. Don’t expect to sit around at one of our closings for a long time. Our wires our sent at 7 am the morning of closing, so the money has been wired before you even arrive at the closing.”

Shelter is not the only lender to conduct their business this way, but they are my favorite.

You can reach them HERE

 or call (770) 724-8053. Tell Robbie, Susan or James that Sally sent you!

Good luck buying a house!  Call Sally English direct at 404-229-2995 for assistance buying or selling a home convenient to Emory University, CDC, VA, Mercer or midtown.