The typical driving distance traveled by independent appraisers, retained by the nation's largest appraisal management companies (AMCs), averages 13 miles in urban and suburban areas this year, according to a new survey conducted by the Title Appraisal Vendor Management Association (TAVMA).
‘We polled our AMC members in light of unsubstantiated statements that AMCs send out-of-market appraisers great distances to value properties,’ explains Jeff Schurman, executive director of TAVMA. "Based on what our members are reporting to us, that's simply not the case. Going forward, we will survey and report on average driving distances quarterly."Â
AMCs typically use one of three methods for controlling how far appraisers travel: geo-coding, ZIP code-to-ZIP code mapping, and/or order-form instructions not to exceed defined distance parameters, Schurman adds.
"That an appraiser services a particular area, how often, and how recently are three critical selection criteria that AMCs use in selecting the most appropriate appraiser for an assignment," says Steve Haslam, CEO of StreetLinks National Appraisal Services. "Does this mean that, in Montana or Wyoming, some appraisers aren't driving further than 13 miles? Of course notâ�¦. The nature of the business is that appraisers sometimes travel outside of their own neighborhood – but that doesn't mean outside of their sphere of professional expertise."
AMCs currently provide approximately 60% of all residential appraisals used in the mortgage industry, and TAVMA's 40 AMC members together account for more than 80% of this volume, the group says. Although some AMCs employ in-house appraisers, most assign orders to local independent appraisers.
"When you consider a 2007 national survey reported that 63 percent of the appraisers in the country work with AMCs, it stands to reason that AMCs will have a deep pool of appraisers from which to choose," Schurman says. "Plus, the economics of the industry give neither the AMCs nor the appraiser an incentive to go great distances to conduct an appraisal."