AMC Background Checks: Fair or Not?

Brian L. Trotrier

Brian L. Trotrier

Executive Vice President and Chief Operating Officer at FREA
A former practicing attorney with more than 30 years experience in real estate and risk management. The Foundation of Real Estate Associates (FREA) has specialized in providing Errors & Omissions Insurance to appraisers and home inspectors since 1993. As a membership organization with over 6,000 members, FREA is one of the largest and most well respected professional associations in the country, providing E&O Insurance for appraisers and inspectors as well as educational opportunities, member benefits, and legal support.
Brian L. Trotrier

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AMC Background Checks: Fair or Not? Appraiser Background Check - Imagecredit Flickr - www.newyorkduilawyer.net

“I was just asked by an AMC to get a background check. Do I have to comply?”

As risk management advisors for Appraisers and Inspectors, this is one of the questions we hear over and over again.
Let’s face it — appraisal fees are lower than ever before. Essentially, AMCs are asking you to do the same amount of work for less pay. In some cases, they’re even asking you to do more work. Does it make sense then that you have to get a background check in order to work for a specific AMC?

Unfortunately, the increased costs associated with getting a background check are not the only problem Appraisers face. Other concerns include identity theft, hassle, and fees that are simply unfair.

  • Identity Theft – Think about the information included in your background check — your name, address, date of birth, social security number — precisely the information needed for identity theft. The AMC, banks, loan officers and others will have access to this information. If that doesn’t scare you, it should.
  • Unreasonable Hassle – In many cases, each AMC requires that you get a background check specifically for them. This makes it impossible to save time and money by completing one background check that you can share with any organization or client that requires it. As if your time isn’t spread thin enough as it is!
  • Unfair Fees – In some cases, background checks ordered by AMCs cost much more than the actual cost. This unfair increase in cost is a significant concern — especially if you’re required to have a separate background check for every organization you work with.

What does a background check tell an AMC about you?

Depending on whether the background check is civil or criminal, it can tell the AMC a number of things about you, including:

  • Your name and other names you’ve previously gone by;
  • your date of birth; other people you associate with;
  • your current address as well as previous places you’ve lived;
  • UCC Filings, bankruptcies and tax liens;
  • DMV registrations;
  • property deeds and assessments; and
  • a nationwide criminal and sex offender record search.

AMCs are preying on Appraisers because they know that it’s not easy to turn down work. Asking for a background check is just one more way they’re making you jump through hoops. For some Appraisers, this is one hoop they won’t touch with a 10 foot pole.

If turning away work is not an option and you do choose to submit to a background check, be sure to ask a lot of questions first.

  • Ask why. The first and most important question to ask is “why”. Why do they need to run a background check on you when you’ve already gone through this process in order to secure your license in the state you serve? Sometimes this question alone can be enough to put a stop to this request.
  • Find out the type of check being done. Are they running a criminal or civil background check (or both)? If the AMC is running a background check that you already have documentation on, see if you can provide that documentation instead of submitting to another check.
  • Ask when (not if) you’ll have an opportunity to respond. Find out when you will receive a copy of the information collected and whether or not you’ll be able to refute any incorrect information.
  • Find out how your information will be protected. What will the AMC do with the information they collect on you? Are they committed to protecting your privacy? Have they ensured that they will not sell, rent or share your information to a third party?

The bottom line is that you do nothave to submit to a background check. It’s entirely up to you. Now, whether or not you get any work from a particular AMC may rely on your decision, but the decision is still yours.

And if you do decide to move forward with a background check, you have the right to ask a lot of questions and get some answers before you commit to anything, but it’s up to you to exercise that right and push back before giving in.

Brian L. Trotrier

Brian L. Trotrier

A former practicing attorney with more than 30 years experience in real estate and risk management. The Foundation of Real Estate Associates (FREA) has specialized in providing Errors & Omissions Insurance to appraisers and home inspectors since 1993. As a membership organization with over 6,000 members, FREA is one of the largest and most well respected professional associations in the country, providing E&O Insurance for appraisers and inspectors as well as educational opportunities, member benefits, and legal support.

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10 Responses

  1. Tom says:

    Just think if you have 20 clients and each one wants a $50 background check per person (a year!!), that’s $1,000 per person out of my pocket. I tell them no thank you! My states require a BC to be licensed. That’s good enough for them that’s good enough for me. I don’t do a BC or low fees. One of them I told no just called me the other day looking for an appraiser to do a job. When I reminded them I will not do a BC they said oh no…ok thank you anyway. Appraisers be patient and don’t except low fees. The pendulum is swinging back our way.

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    • Retired Appraiser Retired Appraiser says:

      Patience has nothing to do with it. The pendulum is heading straight for the appraisers head. The next time that demand for appraisers increases and cannot be met someone else is standing read to meet it (remember there is o new blood coming in). Banks are waiting patiently on the sidelines with vastly improved AVMs freshly stocked with data from the UADs that you were forced to supply. Game Over

      Donna (above) understood the solution to the problem. Unfortunately, the other 69,999 appraisers still have no clue that their heads are already on the chopping block.

      The Good News: Once the pendulum starts heading your way it will happen so quickly you’ll never know what hit you.

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      • Tom says:

        You know what way back when when I was a Realtor my peers were running scared of computer programs like zillow coming out and crying that they would be out of business. Didn’t happen then and it’s not going to happen now to appraisers. If you believe so that’s your choice. I saw back in 06-07 the disaster that was coming and I see what is coming now. My eyes are wide open. My heads not in the sand like some people.

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      • Retired Appraiser Retired Appraiser says:

        Does it truly matter if they leave a few bread crumbs on the table when you’re getting paid the same fee you were making 15 years ago but doing twice the work? Let’s at least be honest about what has already taken place.

        Sure there will be a few buggy whip manufacturers left who refuse to throw in the towel. There are always a select few who have other means of support and live for saying they were the last appraiser standing. In my opinion that’s like wearing a sign around your neck boasting of being mentally challenged.

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  2. Jeremy Hall Appraisals - Colorado Jeremy Hall Appraisals - Colorado says:

    I’m not providing my personal information to a telemarketing person who happens to work in the telecom based amc environment. For actual clients, not third party clients, background checks are a touch more acceptable. Newsflash; Passing background checks is an integral part of the state licensing process. / In every single instance of background check requests, I simply tell them they can absorb the cost of the check, and only then will I comply if they share information on volume and I can expect reliability from them. These days it’s sort of ironic that appraisers are measured and examined so closely, while those doing the examining are quite often not following the basic tenants of unbiased appraisal distribution and fraud prevention.

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  3. Jeremy Hall Appraisals - Colorado Jeremy Hall Appraisals - Colorado says:

    You know, a background check fee would be no big deal, if the panel management was pointed, intentional, and specific to the actual need for appraisers. But when you deal with the open door policy where all appraisers are accepted, but then the lowest fee appraiser gets the assignments, it just does not make sense to pay for background checks if you have a customary and reasonable full appraisal fee of $350 or better.

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  4. Marty says:

    It should not be allowed for AMC’s to request this type of information. The first and most important question to ask is “why”. Why do they need to run a background check on you when you’ve already gone through this process in order to secure your license in the state you serve? 2nd, are the AMC’s going to guarantee information security? I call a company this AMC wanted me to supply with my information over the internet. I asked them what security measures they have in place. They said nothing other than their web site is secure.  So was Target, BOA, and a dozen other companies. I have nothing to hide, but I’ve have had my identity stolen once before.

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