AMC Fee Impact on Appraisal Fee
We often hear complaints from GSEs and lenders that appraisal fees are too high, hence the push for modernization. Yet they fail to acknowledge that this is due to an overly bloated middleman – the appraisal management company (AMC).
As a consumer, you should be aware of the potential for being fleeced on appraisal fees. It’s possible that you could be paying more than double what the appraiser is receiving for actually doing the work, with the excess going to an undisclosed third party.
AMCs are often contracted by lenders to manage the assignment of appraisals. Unfortunately, these companies can add excessive surcharges onto the final bills given to consumers without disclosing them in any way. This means that unsuspecting borrowers could end up overpaying significantly without even knowing it!
Take this example where the AMC, Solidifi, is overcharging the borrower. While the borrower was charged $695 for the appraisal, the appraiser was only paid $301. The AMC fee was $394. Solidifi made $394 to simply manage the order.
AMCs often seek to hide the amount of their add-ons by prohibiting appraisers from attaching their invoices to the appraisal report the consumer receives. And oftentimes, the consumer blames the appraiser for the high fee being charged, unaware that much of it is going into the AMCs’ pockets.
There is no other industry where paper-pushers make more money than actual experts. Yet somehow these same experts get blamed for being “too costly”. It is unacceptable for any industry or profession to be treated in such an inequitable manner, with those who have expertise not receiving proper compensation while paper-pushers receive higher paychecks.
It’s important for the consumer to do their due diligence when it comes to understanding exactly who they are dealing with throughout their real estate transaction process – especially when it comes to appraisals and hidden fees! Consumers need to ask their lender questions about how much they pay individual appraisers versus how much is charged on top of those fees.