In the commercial real estate industry, lenders and servicers team up with trusted appraisal management companies (AMCs) who will be able to clearly describe the exchange buyers expect to receive for their consideration (fees) on a piece of property. When an AMC signs the agreement with the buyer, that company is promising that its appraisers will live up to these agreements. Consequently, it’s important to find out how the AMC makes sure this happens.
As in any industry, there’s constant pressure to achieve key performance indicators (KPIs), to reach higher performance levels, and to ensure that people’s work supports and furthers the organization’s goals. So, when it comes to commercial real estate, the question now becomes how do AMCs ensure an efficient appraisal turnaround time that meets quality KPIs?
It all sounds like a big order – and it definitely is. Luckily, there are seasoned appraisal management experts like Oxford AMC that ensure everything gets done quickly and correctly. Let’s take a closer look at how appraisal management companies ensure turn times and KPIs.
What Is an Appraisal Turn Time?
The amount of time it takes for an appraisal to be completed, reviewed, and certified remains a significant issue for our industry, especially during the busy months of the year.
Appraisal turn time denotes the length of time it will take for the entire appraisal process to be completed and turned around. Your trusted AMC should be able to tell you how long every phase of the appraisal order lifecycle will require, how it will be tracked, and what will happen if these timelines are threatened.
A good AMC will measure their appraiser relationships around three critical areas – timing, communication and quality – in order to come up with an accurate appraisal turn time.
When an AMC and its client set a mutual deadline, the turn time of the appraisal comes into play. But if and when an AMC hits a few bumps in the road, there are some simple steps they can take to ensure more timely appraisals – and things you should expect your appraisal management company to do to help aid in the process. When it comes to ensuring the fastest possible turn time, here’s how AMCs can stay on track:
Five Elements That Ensure Appraisal Turn Time
- After an appraisal order is placed and receives, the AMC should bid out the project as soon as possible. If you must wait to receive authorization from borrowers and compliance officers, coach them on the fact that you need a quick turnaround.
- At Oxford AMC, we bid out the project using your approved appraiser list as soon as possible.
- Inform referral partners, buyers, agents, and borrowers to answer calls and schedule appointments quickly, keeping everyone involved in the process on the same page. Consider using different types of communications technology, such as texting, to expedite the process.
- At Oxford, we engage the appraiser on your behalf. We believe our clients are our partners, and we pursue the completion of your project with the utmost efficiency and professionalism.
- Retrieve all necessary documentation before the appraisal appointment. This includes condo questionnaires, builder documents on FHA new constructions, and fully-executed contracts and amendments. Missing documentation is one of the most common causes of appraisal delays.
- Respond quickly to messages, especially during the peak season. Delayed communications can lead to reschedules, reworks and delays.
- At Oxford, we monitor the appraiser throughout the process. You will receive automated email updates notifying you of progress. When completed, we will review and certify the appraisal for 100 percent compliance.
- Set appropriate expectations with borrowers and referral partners. Busy season turn times will increase in the peak season, as appraisers are in high demand. Recognizing that allows the AMC to build extra appraisal time into the overall schedule.
What Are Key Performance Indicators?
A good AMC will track many Key Performance Indicators (KPIs) in order to effectively manage their internal staff and the professional appraisers. Due to the nature of the commercial real estate business, many KPIs will relate to turn timing issues. Others will relate to the quality of the appraiser’s results and the suitability of the relationship between the appraiser and the AMC’s call center personnel.
An AMC should make clear what KPIs they are tracking; how easy it is for it to track additional client-supplied KPIs, how the AMC manages its appraisers to achieve these standards, and what actions the AMC takes if appraisers fail to achieve them.
For a more retrospect example, if your vision includes providing superior customer service, then a KPI may target the number of HR requests that are unsatisfied at the end of a given week. By monitoring this, you can directly measure how well your organization is meeting its long-term goal of providing outstanding customer service.
So how do appraisal management companies ensure KPIs? Let’s take a look:
Ensuring Appraisal KPIs
Performance and KPI management includes all involved parties in the appraisal process. The important factor is that the KPIs that are set are aligned with the department’s strategy, which in turn is aligned with the overall strategy of the appraisal process. For instance, take that retrospect example and see how an individual employee’s goal is linked to the following organizational strategy of ensuring the completion of a KPI:
- Organizational Vision: To be known for our superior customer service and satisfaction.
- Organizational Objective: To reduce the number of dissatisfied customers by 25-percent.
- Organizational KPI: The number of customer complaints that remain unresolved at the end of a week.
- Individual Member’s Goal : To increase the number of satisfactory complaint resolutions by 15 percent this period.
- Team Member KPI – The weekly percentage difference in complaints handled that result in satisfied customers versus unsatisfied customers.
If you replace the easy-to-comprehend customer satisfaction terminology with that of the appraisal process, it’s easy to see how turn time and KPIs go hand-in-hand. There is no one without the other. Optimal appraisal turn time is able to be met when KPIs are satisfied.
Work With a Trusted AMC
Oxford Commercial Appraisal Company has worked with both lenders and regulators to offer unmatched third-party appraisal management expertise to financial institutions. Our team of AMC experts works hard to ensure a speedy appraisal turn time that meets, if not surpasses, our company KPIs.
Contact Oxford today and we will work to set you up with a safe, secure, and sure appraisal process.