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Working Paper 18-01: Are Appraisal Management Companies Value-Adding? – Stylized Facts from AMC and Non-AMC Appraisals

Published: 3/26/2018
Author:

​Jessica Shui, Economist; Shriya Murthy, Economist

Abstract:
In this paper, we study whether there are any systematic quality differences between appraisals associated and unassociated with appraisal management companies (AMCs). We find that compared to non-AMC appraisals, AMC appraisals on average share a similar degree of overvaluation despite being more prone to contract price confirmation and super-overvaluation. AMC appraisals also share a similar propensity for mistakes, despite employing a greater number of comparable properties. Our evaluation employs relatively simple statistical comparisons, but the results indicate no clear evidence of any systematic quality differences between appraisals associated and unassociated with AMCs.

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