With a New Year comes new responsibilities, and in the appraisal management company (AMC) world, that means in part that it’s time to spruce up your team’s process. In an industry where technology is especially changing the way we conduct business by the minute, one of the most important factors when purchasing property is too often done in an archaic fashion.
That’s why, at Oxford, we are always looking for ways to improve. Whether or not we are confident in the processes that are already in place, we know that we always must be one step ahead of the ever-changing industry. Today, we’re here to discuss how you can strengthen your AMC process for a better, more prosperous 2019. Let’s dive right in!
The Importance of the Commercial AMC Process
First and foremost, let’s remind ourselves why we do what we do. Without getting too nitty-gritty, let’s review just some of the important reasons a commercial real estate appraisal might be conducted. A commercial real estate appraisal may serve to:
- Help prospective sellers determine acceptable selling prices, or prospective buyers decide on offering prices (negotiations between sellers and buyers)
- Assist the underwriter in establishing a value of security for a mortgage (lending purposes)
- Support lease negotiations
- Aid in tax assessments
- Aid in appeals of tax assessments
- Help with business dissolutions
- Support corporate mergers, issuance of stock, or revision of book value
- Aid in government acquisition of property for public use
- Assess monetary damages created by environmental factors
- Ascertain feasibility of construction or renovation
- Advise zoning boards, courts, and planners regarding the probable effects of proposed actions
The AMC Process: An Overall Review
The AMC process details vary significantly depending on the nature of the project; however, the basic structure remains roughly the same across industry standards. First and foremost, the “problem” that needs identification and resolution is determined. This may include defining the intended use of the property, relevant characteristics, and appraisal assignment conditions. Second, the scope of work necessary to solve the problem is planned out. Third, relevant data is collected, verified, and analyzed. This may include market area and property data. The analysis also considers four factors: scarcity, desire, utility, and effective purchasing power. Finally, the appraiser forms an opinion of value and creates an appraisal report.
In general, the full cycle of the commercial real estate appraisal process can take several days to weeks, when you factor in the inspection and subsequent investigative work.
Strengthening Your AMC Process
Keep Clients in the Know
Of course, appraisers must maintain client confidentiality and cannot release the results of a report to outside parties without permission. However, it’s ever important to keep your clients in the know to maintain a streamlined appraisal process. Gone are the days of written reports and physical white papers. If you haven’t already, it’s time to digitize your AMC process.
At Oxford AMC, we monitor our appraisers and the development of the appraisal throughout the entire process. We keep our clients in the know by sending out automated email updates notifying them of progress. When completed, we review and certify the appraisal for 100 percent compliance.
When you are scheduling the appraisal, you should go over who you want to use the report at its completion. For instance, you may want to share the appraisal with the seller, your lender, and perhaps your local property tax appeal board. These people or parties will be identified in the commercial appraisal report as the only ones authorized to use the report. At Oxford, we allow the appropriate parties access to all relevant documents online via unique credentials.
Create a Dedicated Timeline
One important aspect that is often minimized is the appraisal date selection. In order to streamline your process, make sure the appraisal is dated according to your needs. Property can be appraised as of the actual date of the inspection, as of a past date, or as of a future date. The appraiser should decide which date takes liberty in each specific case.
In addition to the date of the appraisal, it is critical that you allocate time to review the work; double-check the real estate appraisal information to ensure that every important factor has been addressed. For instance, does the report properly account for all the rooms in the property and its unique features? Speak up to make sure the bottom line is precise.
Review the Facts
You should never misrepresent facts. Of course, appraisers are expert inspectors and researchers who work tirelessly to discover the true value of a given property. Ensure that your process accounts for any and all relevant documentation – this might include drawings or blueprints of the property, a tax bill for the property, or income statements. It is in your best interest to include all the materials you can during the first go-around; doing so will enable you to do the best and most accurate job possible.
Get Experienced
Are you holding out on obtaining an MAI-designation? Why?! Turn your appraisal projects over to our experienced team at Oxford, and we will deliver a reviewed, certified, and 100 percent-compliant project while working with your staff and local approved appraisers. We ensure that our team is comprised of top-of-the-line partners with the proper credentials. We get things done efficiently and accurately the first time around.
We also work independently. The team at Oxford AMC does not have an affiliated brokerage, which means no conflict of interest, and our reviewers do not compete for local assignments. We have streamlined our processes and expertise in a way that strengthens our AMC process on a daily basis.
As we head into the New Year, keep in mind that there’s always more work to be done. Get in touch with the Oxford team today to learn more about the benefits of strengthening your AMC process today, and always!