Another ‘Pile on Appraisers’ Diatribe?

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Dave Towne
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Another Pile on Appraisers Diatribe? Appraisal Industry and Fair Housing...The National Association of Realtors held their “Virtual Appraisal Summit” on Aug. 5, 2020, focusing on ‘fair housing and the appraisal industry.’

We were fortunate to have Craig Morley, President of the National Association of Appraisers, represent us appraisers, but his presentation was only scheduled for 15 minutes. I’m hoping when he sees this message, he will provide more info about his presentation and the outcome of the “Summit.”

Craig’s presentation had the title: Abilities and Limitations of Appraising Real Estate Under Today’s Rules
Craig Morley, Managing Partner, Accurity Valuation/Morley & McConkie, LLC

I’m just hoping that this Summit was not another ‘pile on appraisers’ diatribe as was done at the Congressional hearing in 2019, when appraisers were blamed for holding back the value of black-owned properties.

In the article below, there is a link to the recording of this meeting, roughly 60 minutes. I have not listened to it.

This was what was reported in RISMedia on Aug. 6, 2020:

NAR’s Virtual Appraisal Summit Examines Intersection of Fair Housing, Appraisal Industry By RISMedia Staff

At its annual Appraisal Summit, held Wednesday, Aug. 5, the National Association of REALTORS® (NAR) continued to examine ways in which its 1.4 million members can help identify and eliminate racial discrimination from U.S. real estate markets. This year’s summit, Fair Housing Issues in Real Estate Appraisal, was precipitated by recent research suggesting home valuation processes could be influencing the wealth gap between White and Black households in America.

“It is well documented that homeownership provides long-term wealth while helping to ensure the financial stability of future generations,” NAR President Vince Malta said in his opening remarks Wednesday afternoon. “However, it has become more apparent over recent months that not everyone in this country encounters the same economic and societal opportunities. I believe REALTORS® have an obligation to actively promote equality, inclusion and acceptance throughout America’s real estate industry, and it is important to me that NAR act as a leader on the issues of housing equality and affordability.”

NAR and its guests examined recent claims that home valuation processes might play a factor in exacerbating racial inequality in America. Ultimately, panelists agreed that more fair and equitable valuation systems would help increase Black homeownership rates and close the aforementioned wealth gap. A recording of the event can be found at this link.

“Today’s event illustrates an important way that structural barriers can persist in homeownership outcomes,” Michael Neal, senior research associate at the Urban Institute’s Housing Finance Policy Center, said Wednesday. “These racial disparities can make Black households more vulnerable in the midst of an economic recession.”

Also joining Neal and Malta were Andre Perry, fellow at the Brookings Institute; Elizabeth Peetz, vice president of government affairs for the Colorado Association of REALTORS®; and Craig Morley, managing partner at Accurity Valuation/Morley & McConkie.

NAR Chief Economist Lawrence Yun recently highlighted a number of proposals that could address lingering racial wealth and homeownership gaps, including building more homes to increase supply and make it easier to convert from renting to owning; increasing access to down payment assistance; and expanding alternative credit scoring models to include rent and utility payments, among others.

Along with the Urban Institute and the National Association of Real Estate Brokers, NAR in 2019 also worked to develop a five-point framework to address the Black homeownership gap. Specifically, the plan calls on the nation to (1) advance policy solutions at the local level; (2) tackle housing supply constraints and affordability; (3) promote an equitable and accessible housing finance system; (4) provide further outreach and counseling initiatives for renters and mortgage-ready millennials; and (5) focus on sustainable homeownership and preservation initiatives.

For more information, please visit www.nar.realtor.

What exactly does “more fair and equitable valuation systems” mean?? The Yun NAR proposals don’t mention anything about appraisal valuations.

The Five Point Plan promoted by the Urban Institute has only ONE very small recommendation regarding values: “Monitor real-time home values and home equity at the local level.”

None of these proposals say anything about ‘appraisals’, or even hint at how ‘appraisals’ might be holding back a segment of the population from greater financial satisfaction.

In light of the above, it seems to me pretty disingenuous that the “Appraisal Industry” has a target on our back, stuck there by folks a lot farther up the food chain than the local appraiser who just tries to establish a fair value for properties, based on local historical data.

Image credit flickr - Rob Swystun
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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8 Responses

  1. Ronny on Twitter Ronny on Twitter says:

    i dont know about you guys but every realtor i ever met concerns with me are, is am i going to have a problem meeting sale price …

    4
    • Baggins Baggins says:

      Rule of thumb; Everyone wants in on the action, all the time. I don’t care what they told you or how they presented themselves, if they’re pushing real estate transactions, they want a piece of the pie.

      2
  2. Avatar Marion says:

    Maybe NAR should produce it’s own study.

    Take those homes they are concerned about, and are listed for sale.

    Boost the list price by a ending zero or two,
    and get back to appraisers on how many offers they received to purchase those properties.

    That way appraisers will know if a “typical buyer” will pay more in a “neighborhood” for similar homes.

    Too many opinions and not enough proof.

    If the properties are undervalued, list and sell them for more money, it really is that easy to get the other neighborhood valuations higher, and it’s only NAR that can adjust those list prices up to get those higher sale prices.

    Oh but that’s right,

    the “value” needs to be “bracketed” for the “appraisal” to be accepted,

    So NAR

    make sure you sell those higher priced homes for cash, to push up the neighborhood numbers.

    Pity that “bracketing” thing wasn’t addressed.

    .

    6
    • Avatar Advocate says:

      There were a lot of things not addressed in the commentary. I listened to the entire summit and there are some serious concerns over what was presented by Andre Perry. All of ihis data referenced Zillow, nothing more. There are plenty of non minority neighborhoods with lower values, but I doubt none of that was even researched. It certainly was not discussed. What is even more disturbing is none of the other presenters even mentioned Zillow or non minority neighborhoods with lower values. It has become obvious Mr. Perry is just stirring the pot with more racial discord lacking factual evidence to support his conclusions.

      6
  3. Avatar chris says:

    I don’t care how long realtors have been selling real estate, they are 99% used car sales people in suites and dresses.

    2
  4. Baggins Baggins says:

    Fannie is also pushing a certain narrative.

    https://singlefamily.fanniemae.com/originating-underwriting/appraisers
    Watch the career opportunities in residential property appraising video. “The national urban league is working with fannie and other industry partners to attract new entrants to the residential appraisal field.”
    https://nul.org/sites/default/files/2019-10/NUL_1Sheet_HCD_RestoreOurHomes_012819_final.pdf
    https://nul.org/housing

    Clearly, those programs were more likely to have helped people because the borrowers had gained a strong advocate through the NUL. Negotiating with lenders to offer special terms and relief for borrowers. Counseling and financial education services for home buyers and home owners appears to be something the general public is in greater need of and provides meaningful long term solutions towards safer navigation through the lending world. This would be beneficial nationwide, from rural to urban.

    The appraiser has no say regarding lenders lending decisions, neither do realtors. Appraisers and realtors do not cause or effect the larger social economic conditions. The economic and social conditions in any given area can be present regardless if people use representation and value services or not. Appraisers merely measure existing value and agents merely facilitate sales. Buyers make their own decisions, with their own resources.

    If the goal is to correct the affordability issues they’ll have to fix the money itself. We also have no say in the federal reserves monetary expansion policies which continues to cause rampant inflation as they devalue the currency and drive up pricing faster than the average citizen can keep up with, hindering both affordability and supply.

    2
  5. Avatar Cotton Cornell says:

    I am a real estate broker and a certified appraiser. I can honestly say NAR is a self serving monopoly. Keep paying your dues and we will push any narrative that makes people feel good! Fannie Mae and NAR are dinosaurs that will go extinct within the next 20 years. Both are doing their best to remain relevant with their fake racism crap however on the horizon is a major shift in how people buy and finance real estate. Once the baby boomer generation is gone so will the typical realtor, broker and mortgage broker. I see more and more people listing and buying on zillow and redfin. Why give away 7% of your equity when selling a house? Why let a broker tack on their overpriced commissions onto your mortgage balance? The market share may not be huge now but the wave is coming! Fannie Mae is an outdated over weight institution that needs to be dismantled! Time for serious change however one thing will always remain. Buyers, sellers and financial institutions will always need an unbiased opinion of value and a home inspection!

    2
    • Baggins Baggins says:

      The existing institutions only need unbiased valuation services when they have to operate under fair market principals. Unfortunately the ability to print their way out of debt on the taxpayers back has resulted in an imbalanced system where first receivers of money may benefit more. The government is supposed to protect liberties. The government is supposed to prosecute those whom hinder the citizens ability to protect their own individual liberties. Plainly speaking, the government should not be involved in lending, insurance, or health care. Poisonous Protectionism is the precise term for this ailment often referred to as taxation without representation. Government programs are inevitably always taxpayer based. The notion of valuation opinion reliability and sound valuation practice to properly measure risk vs reward rests upon the investor taking actual risk. Back to the Too Big To Fail mantra. The beat skips on. You don’t own it, until the title is in your personal vault. With lending we’re dealing with contract law. If you sign it, you own that contract. Personal discretion has nothing to do with that, there are multitudes of well documented and established rules regarding favored party behavior. Vote with your wallet. Vote with your feet. For reduced representation costs, be careful what you wish for. It’s not a simple or safe field to navigate, real property sales.

      http://www.ronpaullibertyreport.com/archives/great-news-protectionist-president-peels-back-protectionism

      1

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Another ‘Pile on Appraisers’ Diatribe?

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