Tagged: neighborhood

Until Census Data is Made Illegal in Appraisals, There will Be Discrimination 5

Use of Census Data in AVM & Discrimination

Every single appraisal any of us do has a census tract number as a required element. There are no exceptions for federally regulated transactions. Even where no bias or prejudice is intended, language that the PC Police have ascribed as being ‘potentially racist, biased or prejudicial’ has long been prohibited. Buyers clearly do care and weight ‘neighborhood or school or special amenity neighborhoods’ in terms of ‘desirability’, but no appraiser can consider this. We are even prohibited from having people in pictures which could be indicative of race. It’s gotten so nuts that property owner’s own photos of religious icons,...

Biden's Claim of Racial Bias in Appraisals Faces Criticism from Appraisers 22

Biden Claims on Racial Bias in Appraisals

Over the past week or so, Presidential Candidate Joe Biden publicly called for more regulation and oversight over appraisers to combat racial bias. He specifically cited the Brookings Institute Study ”The Devaluation of Assets in Black Neighborhoods, The Case of Residential Property”. If you are unfamiliar with this study, in a nutshell, the findings accuse appraisers of undervaluing properties in black neighborhoods. The study is an easy read and can be found here. We will warn you, much of the data used in the study carries very little weight as Census Bureau (self-reported data) and information from Zillow were used....

Property Selection for analysis & Statistics in Appraisals - Appraisers Blogs 11

Property Selection for Analysis & Statistics

The importance of proper property selection and ‘statistics’ in appraisals… Appraisers, I would like to direct you to info written by Mr. George Dell in his latest blog post circulated on July 3, 2019. This is one of the best explanations I’ve seen him write on this topic, of how to select and analyze properties when doing appraisals, and why correct ‘statistics’ presented in reports is important. I first became aware of the importance of proper property selection and ‘statistics’ when I attended an appraiser’s training class in 2008 in Las Vegas. The primary speakers were Mr. David Braun and Mr. Patrick...

Should Appraisers Study Statistics? - Beyond the Old Inferential Statistics 11

Should Appraisers Study Statistics?

Yet what was (and still is) presented in appraiser education is the old inferential statistics. Difficult statistics. Convoluted statistics. Statistics for appraisers started to become a hot topic some 15+ years ago. I was more involved with the Appraisal Institute then, and often argued that with the changes in data sources — appraisers would have to learn to apply statistics. Around 2003, the AQB (Appraiser Qualifications Board) revised qualifying education to include the requirement for Finance, Statistics, and Valuation Modeling class. Although I was not solicited to write this class, I was put on the development team, which reviewed and suggested edits and improvements. The...

Race Never Considered... Emerging Narrative of Appraisers Being Racists 65

Appraisers Don’t Use Race

Appraisers don’t use race… Race is NEVER considered during a valuation Last week in a congressional hearing on the future of the appraisal profession, some research was used to suggest appraisers are showing racial bias and essentially undervaluing black neighborhoods. I was not expecting the conversation to go that way during the hearing and I’ll admit I’m deeply concerned about the emerging narrative of appraisers being racists… In the congressional hearing a panelist talked about a study that shows black neighborhoods are devalued by $48,000 compared to otherwise similar white neighborhoods. That’s alarming and society needs to have some serious...

Let's Get Those Pesky Appraisers Out of the Way! Hybrid Appraisals Part 5 22

Robust & Precise Inspections – Hybrids V

No more pesky appraisers blowing up sales commissions & bonuses & salaries… A “hybrid” appraisal is a new name for where the property inspection is separated from the analysis and appraiser’s certification. It is faster and cheaper and… This is Part 5 of a (soon to be, so far) six part discussion of Hybrid Appraisals. Part One, Two, Three, and Four are behind these links. Many years ago, I had several trainees, and as each gained experience and competence going out with me, I first let them inspect homogeneous neighborhoods, with me driving by on the outside to check on locational and optimal use issues. In time, they did...

USPAP or Not Mueller REO report 36

Mueller REO Hybrid Appraisal Report

Another Mueller Report has surfaced. The report is a Mueller REO Hybrid Appraisal Report and it was given to an appraiser as a sample. This one raises more questions than the last one! The photos from the property inspection do not tell the appraiser one thing. The photos are dark and the repairs the inspector states are needed, simply are not seen in the photos. It begs the question, does the appraiser have adequate information to complete a credible appraisal? Now take a look at the Mueller REO Hybrid Appraisal report. Pull up the report and follow along. Some things have...

Racial Bias: Redlining in the Modern Era 13

Racial Bias: Redlining in the Modern Era

…are they behind this modern day redlining?… The broad definition of an algorithm according to Merriam Webster’s Dictionary is “a step-by-step procedure for solving a problem or accomplishing some end.” It is pretty basic and fully understood, right? Now think back to those dreaded English classes. When did you learn about acronyms? Grade School, High School, College? Regardless, let’s just say it was a while back, so I will refresh your memory. According to Merriam Webster’s Dictionary, an acronym is” a word formed from the initial letter of words of each of the successive parts or major parts of a compound...

Report Observation & Trigger Points - Don't Fall Into a Trap! 10

Report Observation & Trigger Points

Appraisers, this is another essay written about a report I have ‘observed.’ I’ve mentioned before that I “come in contact with” appraisal reports from a variety of sources. Those that I determine have significant issues I write about. Conclusions about the ‘real value’ will be disclosed below. Trigger points for having reports formally reviewed are discussed. I do this because a majority of appraisers do not participate and interact with their peers on a consistent basis, and therefore may not get exposed to items that clients and lenders see in reports, which they question. I believe it’s important to expose items in reports that...

Size vs. Value - Finaly...The Truth About Price per Sq.ft. in Valuations 12

Truth About Price per Sq.ft. in Valuations

…has nothing to do with size… This article from realtor.com titled ‘Forget Price Per Square Foot: The More Accurate Ways to Determine Your Home’s Value’ explains why price per square foot is not a good gauge of value. Excerpt: A home’s price per square foot is a common way to quantify its value… Many home shoppers even use it as a determinant for whether or not they’ll even consider touring a home. But that doesn’t mean it’s the most accurate, end-all and be-all way to gauge a home’s value and compare it with other houses. Why? Because all homes are...

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