Working directly with the client vs. through an appraisal management company

Working directly with the appraiser allows back-and-forth dialogue between client and appraiser which facilitates the appraiser gathering all the information necessary to prepare a complex appraisal report. However, when making use of an appraisal management company (AMC), the need for client and/or appraiser anonymity may prohibit such unrestricted dialogue. Without the opportunity to gather information freely, only the most basic of appraisal services for limited intended uses can be offered online.

If working directly with the client, the online appraiser has the ability to enter into an extensive dialogue, if necessary, in order to ascertain all the relevant issues pertaining to a particular appraisal assignment. Such a process is particularly necessary when the property is no longer available for personal inspection such as property which has been lost or stolen. In such instances, the appraiser is forced to base value conclusions on extraordinary assumptions, not the least of which is that the item existed in the first place. For complex online assignments such as litigation involving a replacement cost appraisal of a stolen diamond ring, the scope of work is broad, the appraisal process is sophisticated, the appraisal report is fully narrative, and the appraiser makes use of well-defined extraordinary assumptions. The appraiser's fee will reflect the amount of effort involved which might be extensive.

On the other hand, appraisal management companies offer the public a cost-effective method of acquiring an appraisal and/or related anecdotal information for certain types of property and for a limited number of intended uses. Normally, the AMC client agrees to limit the scope of work required of the appraiser and to limit the manner in which the appraisal report will be used. The client completes a questionnaire and provides digital images on which the appraiser can base a value conclusion. There may be little if any opportunity for dialogue between the appraiser and the client due to issues surrounding the possible need for client anonymity.

Note: Appraisal management companies offer appraisal services to the public by making use of professional appraisers acting as independent contractors. A fee-sharing arrangement compensates both the AMC for their efforts and the appraisers for their expertise. Such an arrangement is consistent with commonly accepted appraisal business practices in both the real property as well as personal property appraising disciplines.