Prohibition is Back!
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AMC strictly prohibits the use of third party services.
A recent review of an engagement letter from a large national appraisal management company revealed something pretty peculiar…
“An appraiser is prohibited from using any third party services.“
Wait, What? No third party services?
I am no attorney, and certainly do not know all the aspects of law, but it seems that the definition of third party services is pretty self-explanatory.
To be sure I am not mistaken; I researched the definition of third party.
“A person who is not a party to a contract or a transaction, but has an involvement… The third party normally has no legal rights in the matter, unless the contract was made for the third party’s benefit.”
Or from the more traditional source:
“1: of, relating to, or involving a third party. 2: of, relating to, or being software that is created by a vendor to be compatible with the products of another vendor. “
So our client the lender, is a party to the transaction and the borrower is the other party. Everyone else is a third party; exactly what I thought.
I am already in trouble here. I used Google to access the online versions of the dictionaries and Google is considered a third party by definition. So appraisers, make sure you do not use Google or any other search engine to access locality tax records, areal maps, neighborhood demographics, or what-ever else you need to obtain for a credible appraisal report. It simply is prohibited by this appraisal management company. What about my internet provider? They too are a third party service.
Now that we understand what a third party service is, the appraisal management company is a third party service. So appraisers, make sure you communicate directly with the lender as you are prohibited from using any third party services. Remember, don’t use Google or any other search engine to locate the lenders phone number, it is prohibited by this third party appraisal management company. Please, what-ever you do, do not use Mercury Network, Appraisal Port, Appraisal Scope or any of the other portal as they too are a third party service. Wait, the phone service you have is also a third party service!
Don’t even think about contacting the Real Estate Agents, they too are third parties as is the MLS systems owned by CoreLogic and others. Better camp out in front of the subject and wait for someone to let you in because the lockbox on the front door is operated by a third party service. You, the real estate professional are prohibited from utilizing these third party services.
Do you think it would be OK if I drove my leased vehicle to the subject and comparables? The leasing company is a third party you know.
Now dig through your attic and pull out the old typewriter. You see, alamode, ACI, Bradford, and the other software providers are also third party services. As is Datamaster, Spark and others that are designed to import data. This appraisal management company strictly prohibits the use of third party services.
Clearly this is not what this appraisal management company intended, but it demonstrates their lack of appropriate communication and understanding of the appraisers responsibilities. It demonstrates a very one sided “dictatorship” not a partnership.
What I really find to be disturbing is the huge push for hybrid appraisal products where someone the appraiser does not even know nor trust; an anonymous third party is providing the data for the appraiser to rely on to complete an appraisal.
I consider myself fairly intelligent, but certainly not the smartest out there, but the concept of accuracy, credibility and professionalism seems to have gone away with the onset of appraisal management companies. The appraisal management company fast and cheap mentality is harmful to everyone and has really damaged the profession.
Legislative sessions are approaching soon for most states. I encourage each appraiser to sit down face to face with your representatives and share your experiences with appraisal management companies. Provide documentation on how consumers are being harmed by their use. Show conflicts of interest with amc staff appraisers, and offer solutions in a positive professional manner. If you cannot do this, please support your state coalitions. Appraisers represented individually and through coalitions, are making positive change. Legislators are listening. Please be a part of the solution so we can get back to real appraising.
By TJ Everett, Certified Real Estate Appraiser