Coester leads AMC consolidation charge with new acquisition
Coester Appraisal Group is beginning its move to acquire smaller appraisal management companies with the acquisition of Appraisal Scope, a small boutique firm with about 15 employees. CEO Brian Coester didn't release many details on the deal, but said it is not a lump sum cash transaction. Instead, Rockville, Md.-based Coester will retain all employees at Washington, D.C.-based Appraisal Scope and slowly take over any existing contractual obligations, worth about $3 million, as the Appraisal Scope brand is slowly phased out. The acquisition helps Coester, with a current staff of around 55 employees. expand geographically. "Lenders want national AMCs," said Coester, "and we are looking to expand even in the midst of a bumpy recovery." Coester said current market share for his company is approximately 2%. Current market conditions are presenting opportunities for AMCs to expand, he added. The Uniform Appraisal Dataset took effect Sept. 1, requiring all mortgages sold to Fannie Mae and Freddie Mac to follow the same set of protocols and documentation. This, along with the rising cost of errors-and-omissions insurance and statewide licensing fees is making business more costly for smaller players. "If an AMC isn't doing a least 2,000 appraisals a month, it can be hard to survive," Coester said. Since the UAD came in force, the market predicted a trend of consolidation among AMCs, with bigger players getting larger by buying smaller appraiser networks. Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.