Commercial Appraisal Management Companies?

[CBBoston]

We were recently contacted by LandAmerica to do senior housing/nursing home appraisals. From what their rep said they have something like 70 in-house commercial appraisers and that much of their appraisal work is a result of other consulting assignments. Most of their assignments are multi-property deals they are "subcontracting" if they don't have the staff to cover it. They claim to do a 60/40 fee split but didn't say what the fees were. Our experience with multi-property deals is the clients generally want them done cheaper than a regular single property deal. Are they an AMC? Good question. I've seen a number of appraisers try to put together consortiums over the years to be able to attract bigger jobs. Don't know of any that really worked.

 

[Vernon Martin]

Several years back, LandAmerica acted as a commercial AMC for IndyMac's commercial deals.

About attempted appraiser consortiums, most have failed. The most successful one has been Integra.

 

[Kali the Boston Terrier]

Who just got bought...

 

[Boonders]

Several years back, LandAmerica acted as a commercial AMC for IndyMac's commercial deals.

About attempted appraiser consortiums, most have failed. The most successful one has been Integra.

I'd say a very successful consortium...but is turning into a single entity.

 

[CBBoston]

I'm not sure I agree that commercial lenders will forgo AMCs. The larger will look at it as a way to unload the cost center of paying internal review/managing appraisers at $100+K plus benefits a year. We've worked with several smaller banks in our area and let me tell you most have no clue what an appraisal is let along recognize a bad one. We see some asking for complete narratives when a summary would be good enough. When they order the complete narrative the low bidder gives them a concise verging on letter appraisal. Of course then they wonder why we charge so much more. Most really should have someone experieced managing/reviewing their appraisals. Particularily since the regulators often review individual reports.

 

[SRQCUB]

I've had these contacts for the last two years plus, AMC looking for commercial work, BUT it was in a rural area and i can foresee the difficulty they MIGHT have had in locating an appraiser and were forced to go the AMC route to find an appraiser.

Also FL / GA bank about 15 branches, AMCed some commercial foreclosure work to an AMC that an associate of mine did.

Yes it will go the way of the AMC cause even the little local banker is in HOT water, Personally I've done over $2,000,000 in foreclosure work for a rural bank. Never have you truly seen a disregard for the system. AMC' are a new way for the banking industry to wipe there *ss.

 

[Vernon Martin]

When LandAmerica was serving IndyMac's commercial appraisal ordering and review needs, I asked them if they served as an AMC for any other commercial clients, and they said no. They did desk reviews only, out of Tampa. This was 2001-2002.

I spent a year at PCV/Murcor, which is also essentially an AMC. We did a lot of commercial ordering and review work for Imperial Capital Bank. This was 2005-2006. I've heard that Imperial has now taken most of this work in-house.

The impression I got from these experiences is that very few commercial lenders are willing to outsource the appraisal function, either out of concern for quality control or else out of a desire to control appraisals in less legitimate ways.

 

[PL1957]

The impression I got from these experiences is that very few commercial lenders are willing to outsource the appraisal function, either out of concern for quality control or else out of a desire to control appraisals in less legitimate ways.

Appraisal Management is becoming a profitable operation as many smaller banks are being required to show "independence". Some of these banks are filling the gaps by having "clerks" order the appraisals with reviews being feed out to third parties. Others are choosing to outsource the entire operation. C&W, CBRE and Duff & Phelps (among others) offer this as a service to lenders. A whole slew of smaller, independent operations also fill these niches. It will be interesting the see if these develop the same problems as residential AMC's. I sure hope not ...

 

[Joyce Potts]

Hopefully the up and coming commercial AVM's will result in far less need for full commercial appraisals or commercial AMC's.

 

[SRQCUB]

Joyce,

Commercial AVM, WHAT?????, less need for "full" (whatever the heck that is) appraisals.

If at all possible could you please provide further comment?