What Is an AMC and Why Does It Exist?
Understanding the Role of Appraisal Management Companies in Real Estate Valuations.
When buying, selling, or refinancing a home, the appraisal process plays a vital role in determining a property’s fair market value. But many homeowners and even real estate agents find themselves asking—what exactly is an AMC, and why does it exist?
Let’s break it down.
What Is an AMC?
An Appraisal Management Company (AMC) acts as a middleman between lenders and appraisers. Their main role is to coordinate the appraisal process for mortgage transactions. When a lender orders an appraisal, they often use an AMC to assign an appraiser, track the order’s progress, review the report for compliance, and deliver it back to the lender.
In short, the AMC manages logistics and communication—making sure everything stays compliant, timely, and standardized.
Why Do AMCs Exist?
AMCs became common after the 2008 housing market crash. In the years leading up to that crisis, there were concerns about pressure being placed on appraisers to “hit” certain target values in order to make deals work.
After the crash, federal regulations were created to protect the independence of the appraisal process. One of those changes was the Home Valuation Code of Conduct (HVCC), which prohibited lenders and loan officers from directly influencing or selecting appraisers for their own loans.
AMCs were formed as a way to create separation between the lender and the appraiser—helping ensure that appraisals remain objective, unbiased, and compliant with federal and state guidelines.
What Do AMCs Actually Do?
While every company operates a little differently, most AMCs handle the following:
Order Assignment: Selecting an appraiser from a pre-approved panel that meets geographic and competency requirements.
Compliance Oversight: Ensuring each appraisal follows USPAP (Uniform Standards of Professional Appraisal Practice) and lender-specific guidelines.
Quality Control Reviews: Checking reports for errors or missing information before they’re sent to the lender.
Payment Processing: Handling payment to the appraiser and billing the lender.
Recordkeeping: Maintaining documentation for regulatory compliance.
The Pros and Cons of AMCs
Pros:
Helps prevent undue influence on appraisers.
Centralizes and streamlines order management.
Provides lenders with consistent appraisal delivery systems.
Cons:
Appraisers are often paid less than traditional private work due to AMC fees.
Communication can be slower when filtered through multiple layers.
AMC vs. Private Appraisal
It’s important to note that not all appraisals involve an AMC. At Definitive Valuations, we perform private appraisals directly for homeowners, real estate agents, attorneys, and others—without the middleman.
Private appraisals are used for:
Pre-listing or pre-purchase evaluations
Estate or divorce settlements
Tax assessment appeals
Cash purchases or investment decisions
In these cases, you can work directly with a qualified local appraiser who knows your market and can communicate directly with you throughout the process.
Final Thoughts
Appraisal Management Companies exist to create independence and oversight in the lending world—but they aren’t always necessary for every type of appraisal.
At Definitive Valuations, we believe in transparency, education, and accuracy. Whether your appraisal is managed through a lender’s AMC or ordered privately, our mission remains the same: to deliver defensible, trustworthy, and locally informed appraisals across North Alabama and Southern Tennessee.
Need an appraisal for your home or property?
Contact Definitive Valuations today to speak directly with a certified local appraiser. (256) 828-9275
