LaPlante Appraisals' Blog

 

AMCs were established after the 2008 crisis to bring back trust and impartiality in the appraisal process. Unfortunately, trust has still proven to be an issue as fee transparency has come into question. Most consumers do not know that the “appraisal fee” charged on the closing statements entails the bundled charge concept which is where the AMC absorbs a majority of the fee, while the appraiser is left with a greatly reduced amount.

These discussions in the industry have shifted towards focusing on the fee splits and the additional costs that come with it for homebuyers. For example, statistics show that there are certain transactions where the AMC’s share can be equal to, or at times greater than, the appraiser’s payment. Such practices greatly increase the overall cost during closing. Regulators, consumer advocates, and even industry professionals have all united on the topic, pleading that the market operates on fairness and rules, and those changes are necessary.



At present, AMCs oversee the entire process of appraisal for various lenders which includes hiring appraisers, distributing assignments, and ensuring quality control is maintained. However, fee transparency is lacking as the recent data showcases a gap between payment made by the consumer and the money the appraiser receives. For example, a recent Business Insider analysis places certain AMC’s cut can be equal to or greater than the appraiser’s fee which raises an entirely different set of issues.

Now is the time for homebuyers and Realtors to take control. Ask your lender or realtor for a clear, itemized breakdown of all appraisal-related fees. Use this information to compare costs, negotiate better terms, and ensure you’re not overpaying for services you don’t fully understand. Empower yourself by staying informed—your vigilance can drive industry reform and lead to a more transparent and equitable mortgage process for everyone.