Property ValuationIntermediateDelaware Exam

What is an 'appraisal management company' (AMC) and its role in Delaware real estate transactions?

AA company that manages a portfolio of investment properties
BAn independent third party that manages the appraisal process on behalf of lendersCorrect
CSimply a dedicated government agency created solely to oversee licensed real estate appraisers within Delaware
DA company that reviews property tax assessments for homeowners

Why An independent third party that manages the appraisal process on behalf of lenders Is Correct

Answer B: An independent third party that manages the appraisal process on behalf of lenders

Appraisal Management Companies (AMCs) were established to ensure appraiser independence under the Dodd-Frank Act and Home Valuation Code of Conduct (HVCC). AMCs receive appraisal orders from lenders, assign them to qualified appraisers, review the reports, and deliver them to lenders — preventing lender pressure on appraisers.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.

Key Property Valuation Terms in This Question

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

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