All This Will Do is CREATE BIAS!

All This Will Do is CREATE BIAS! 

All this will do is CREATE BIAS… How does one stay unbiased if they repeatedly get sued or raked over the coals every time they do an honest, true appraisal that does not meet the expectation of untrained members of the general public… 

Does bias exist? Of course. Does it exist in appraising? Rarely, if ever.

Not one of the publicly aired cases has shown any verifiable facts or data to prove their claims. Bias in appraising is rare and far less than in nearly all other vocations. Why? Because appraisers are and have been, for decades, already held to ‘no bias’ standards that far exceed nearly all other jobs and career positions. It is built-in to USPAP, our certifications, and ethics, that we remain the unbiased link in the process.

When an appraiser uses the best available comparable properties, comparables have no ethnicity; they are brick-and-mortar. All this new witch hunt will do is set yet another excuse to attack the appraiser and to make way to be bullied into hitting a higher value or threatened they will be nailed with ‘bias.’

What is the purpose of Dodd-Frank? What is the purpose of AIR/Appraiser Independence regulations? Why create AMC/Appraisal Management Companies to create that protective layer and avoid pressure to make an appraiser ‘hit value’ if just to set appraisers up for attack from anyone who wants to force a higher value? All this will do is CREATE BIAS.

How does one stay unbiased if they repeatedly get sued or raked over the coals every time they do an honest, true appraisal that does not meet the expectation of untrained members of the general public who do not understand how appraisals work? Our job is not to appraise what anyone THINKS a home is worth, or get beat up on the playground and have gum put in our hair. An appraisal is typically 25-45 pages of us PROVING our opinion of value; backed with data. What anyone might THINK/estimate a home is worth, can be something quite different. Hats off to jumping on the bandwagon and further destroying the one link in the home buying process that actually protects the lenders and protects buyers from making a potentially horrible financial decision that could put them underwater in their loan for the next 10-20 years.

By Krystal S, Certified Real Estate Appraiser

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29 Responses

  1. Avatar CJK says:

    “protects the lenders and protects buyers from making a potentially horrible financial decision that could put them underwater in their loan for the next 10-20 years.”

    Last year I informed one of my lender clients that a property was under contract for $80,000 above a recent sale of the same model home located on the same street that closed the week before my appraisal request. That comparable was also the highest sales in the area. The lender canceled the request, gave it to another appraiser, closed the loan and no longer uses me. I have no idea how the other “appraiser” came up with comparables to support the inflated value, but it appears that is what some of them do. I wonder how much that property it truly worth today. I lost a client, but I can sleep at night.

    • Avatar Angel Roberts says:

      Clearly the issue is your bias! There is mismatched incentives to truly protect when the lender does not need to pick an appraiser that is there to protect them, but rather to get the deal through. The lender just needs someone to blame if/when the loan goes bad. People complained about appraisers doing this when values were increasing but they ignore that those not doing this were not given work because the incentive is to give work to appraisers who will be unethical. If there is bias in the industry I’d wager that 99%+ of it is to not lose clients and “lowballing” minorities does nothing to retain clients, just the opposite.

  2. Avatar Angela Robers says:

    I think you explained it quite well that this will be used to pressure appraisers to appraise above market value or be sued putting them between a rock and a hard place of being ethical and getting sued or being unethical, being praised until some of those appraisals are scrutinized when a loan goes bad. The appraiser is reduced to the scapegoat.

  3. Avatar Krystal S says:

    Thank you for publishing my ‘rant’ on the lunacy of this new opportunity for attack on appraisers. As is often the case, when ‘Big Brother’ jumps on the bandwagon, the steps they chose in their grandstanding completely undermine the cause they are pretending to support. All this will do is bankrupt many innocent, good, honest appraisers, who are guilty until proven innocent.

  4. Avatar mark robert freitag says:

    I have observed that the stories which have received high media exposure, and purport to prove appraisal bias, seem to be missing “the rest of the story”. Not once have I heard that the appraisals were peer reviewed by local appraisers and which of the appraisals were deficient. Why is this?

  5. Baggins Baggins says:
    The Appraisal Foundation Opens Applications for Board of Trustees 
    The Appraisal Foundation announced today that it is seeking qualified candidates to fill five at-large trustee positions for its governing body, the Board of Trustees. These five at-large openings include seats designated for a consumer representative, academic, and a state licensed or certified appraiser not affiliated with an Appraisal Sponsor of the Foundation. The individuals elected will serve three-year terms beginning on January 1, 2024.

    Going once, going twice…

    • Baggins Baggins says:

      Found this in a link from the above link. Care to take a guess at who will not be fairly represented? At this point we’re just waiting for Bunton to come out of the closet, or something like that. Ah, the miracles of protected class identity politics, and the ability to simply choose to become a protected class. It’s all the rage and everyone is trying this out, you should too. Appraisal challenge for anyone to reconcile merit based practices with this. Keep paying those member dues, ha.

  6. It is disheartening to see the recent push to address potential bias in the industry, as it seems to be based on a misunderstanding of how appraisals work.

  7. Avatar Will says:

    Most likely we will have a new group in the White House in two years and all these unfounded “bias” rumors will just disappear. These “bias” rumors are political and not founded on any facts.

  8. Omega3shorty on Twitter Omega3shorty on Twitter says:

    I underwent my Apprasial training over the last year and a half. I would watch as lenders and sellers would piss and moan when they wouldn’t get a value they wanted. What’s the point of doing honest work if we get threatened and harassed when they don’t get what they want?

  9. Omega3shorty on Twitter Omega3shorty on Twitter says:

    I’ve come to the conclusion that appraisers are simply liability scapegoats. IMO this profession is a joke. The comments in the article are spot on.

    • Baggins Baggins says:

      Well it depends on where your clients are at. Many appraisers just run mortgage lending because one only has to make the client sale once, then work orders keep coming in. Many step away from every form of mortgage lending and work irs estate probate legal independent type requests. Those require a constant marketing and sale effort, with the balance being one works with people whom are not required to engage appraisers, but engage anyways. The additional oversight in lending provides some actual working benefits for appraisers, many eyes and opportunity to revise mistakes, this is the proper place to start until experience is gained and dynamic skills can be expressed with relative ease and memory without needing reference. Where as with legal and such, all or nothing, once a report is signed and sent, no revision may even be possible or accepted. If you thought an upset lender was difficult to deal with, wait until a lawyer gets personally upset with your service results or availability. Pick your poison.

      You’ll only be the scapegoat if you personally allow that to happen. Focus on general memorizing all regulatory guidance related to appraisal, with a focus on liability related continuing education. Never stop reading but you should at first focus the reading based on specific client choices and the associated regulatory oversight. Here, about a decade ago one appraiser made a regulatory guidance flow chart so people could better understand the convoluted nature of appraisal regulatory oversight. Really though, just start with reading your complete state based real estate regulatory book, the HUD handbook front to end, as well as the FNMA handbook front to end. Then dip into Dodd Frank with emphasis on Reg Z, follow with FIRREA. Then devote yourself to having skills similar to a professional home inspector, the ability to know housing components inside and out, including costs. Just yesterday I was reading a home inspection document where the ‘inspector’ confused an 80’s FPE panel with knob tube systems. Like geesh, the sad part is I’m probably the only one reading his report who understands the error. The trick to competent appraisal is redundancy. If you can talk the language of real estate, you should train yourself to be able to type that down in reports without any assistance or pre fill writing. Every single report is a form of consultation, uniquely tailored to the individual request and scope of work at hand, get your mind around it. That’s really the biggest difference between lending and non lending, dynamic scope of work challenges.

  10. Avatar Krystal S says:

    Now, in my email, is yet another attack added to the appraiser witch hunt. “Greetings,

    The Department of Veterans Affairs (VA) is publishing this Circular to inform the lending industry of enhanced oversight procedures that will better enable VA to identify discriminatory bias in home loan appraisals.

    As of December 2022, VA enhanced its oversight procedures to detect potential discriminatory bias in appraisal reports. VA is reviewing randomly selected reports submitted to the home loan guaranty program using an enhanced technology scanning software. If the initial review indicates a potential discriminatory bias, VA flags the data for an escalated review.

    Consistent with the PAVE Task Force action plan (, VA continues to strengthen its efforts in eliminating discriminatory practices in the appraisal process.

    For more detailed information on this change, this Circular has been posted to the following URL:


    Loan Guaranty Service”

    • Avatar IMJSAYN says:

      “If the initial review indicates to VA a potential discriminatory bias, VA flags the file for an escalated review. If VA’s escalated review confirms a discriminatory bias, the appraiser will be subject to removal as a VA-approved appraiser; and VA will refer the case to the proper enforcement agencies for further investigation.”

    • Baggins Baggins says:

      Missing the IVPI proposal yet?
      This was the last thing I was really inspired by in this industry. Even personally met with one of the authors in hopes I could get in floor level at it’s creation. Sadly this never materialized. The concept represents the difference between a self represented industry by appraisers for appraisers, vs being pulled around by conflicting interests. Notably absent in our current systems is legal professionals and law enforcement professionals presence in rule making process.

  11. Avatar Turner says:

    About 10 or 15 years ago, when I renewed my certified general license I did not realize that I also had to renew with FHA, and found about a half year later that I was no longer on the panel and I would have to start the process over, to get back on the panel. You know what, best mistake I ever made, I have not missed it. I now stick to the high end properties that FHA, VA and some FNMA do not want or are above their pay grade. The results are what appear to be more knowledgeable reviewers, or perhaps, an Baggins recommends, with 39 years appraising, all my comments are original, as I look at the individual property and I get few call backs. I take a little longer on each report, and charge more, if I do not get the bid, I say thank you, have a nice day, because I am busy.

    • Baggins Baggins says:

      Yeah how to review a specialized service one is not even qualified to perform themselves… It’s checkbox review so when you go full narratives and theory, with detailed data conclusions, it checks all the boxes and they move along, time restraints and quotas and all. I think that’s a state based thing regarding data sharing with your FHA renewal or at least the FHA approval became automated in conjunction with the ASB approved appraiser data, or something like that.

      Appraisers can check the validity of their FHA status here; When I help people find appraisers in areas I know nothing about, this is my very first internet stop. Turner you never know man, you may be back on that list even with no personal effort, check it out.

  12. Avatar Turner says:

    As to bias, I have a real problem with local Sales agents, buyers and sellers. Why would two identical houses a half mile apart, same age, same size, same roof and siding materials, perhaps built by the same builder, with woods in between, on similar lots sell for $150,000 difference? Is it because in 1960 the house in one development was section 8? They have been sold and sold but still sell for less. The loans have been paid off, all are equal. Both houses have up dated their kitchens, baths, added a garage, planted their lawns. But it really gets me when I am looking for comps for a similar house and see this difference. Should I include a comment that the agents were racially biased when they sold the houses? Was it the buyers who were biased? Should I include both houses in my analysis? Should I give both sales equal weight? Or should I step into the mud and say one was a bias sale and no weight? Anyone run into this problem? How about a whole town or neighborhood? This was an x neighborhood so I used no sales? This can be better than skiing, lots of slippery slopes. Perhaps we need to start asking our legislature representatives for their recommendations. You want to see a governor dance?

    • Baggins Baggins says:

      Well nobody wants to see the governor of Colorado dance, that’s for sure. Run the AVM for each unit, would be interesting to see the differences reflected there too. I don’t know, location, location, location. Homes may be equal but livability factors from one local to the next do certainly vary. Denver is moving on rent controls and new minimal habitability rules. Examples of how local jurisdiction may influence housing values. Section 8 in commercial often drives up commercial housing values and rental tables. Because when section 8 issues updated higher cost tables, all the landlords raise their rent to compensate, GRM naturally follows. Trickles all the way down to residential. The game for landlords whom appeal to individuals whom hold portable section 8 vouchers is to hold assessed value down while maximizing rental intake. There may be some accuracy to value difference based on previous use though, section 8 approved landlords may invest just as much as a caring attentive individual into a home over time. The difference though is the section 8 landlord keeps spending on the same items, complete materials replacement due to neglect and abuse. Where as the individual probably treats the home better and their investments result in actual improvements, not just redundant maintenance to prep for the next round of rental occupancy. That’s a tough call, one would have to look at a myriad of details to really figure if it’s agency bias or some other underlying cause. That being said anyone looking for commission based sales agents to provide accurate values need their head examined. The game for sales agents is to acquire low to either broker the sale for a finders fee or hold or resell to investment buddies, then flip it high on the return cycle. Agents are the most obvious data source to identify bias in pricing based on clientele at hand as well as most probable sales dispositions. Same old, same old.

  13. Avatar Honest Appraiser says:

    I watched the “State of the Profession” discussion with Bunton from TAF and the head of ASC, below are the notes I made while watching. Basically the entire discussion was about how TAF is creating an entire new program of education that will be mandated to ALL appraisers to take to stay USPAP compliant. Even though he admits that bias is already addressed in USPAP since the beginning. Again, like AMC’s it’s just another money grab taken from the pockets of the Independent Appraiser. Just my opinion, I could be wrong

    1. WAY tooo much DC influence in this panel – Moderator and both speakers are DC based and spend their entire lives there best I can see. Diversity of thought??
    2. Instead of re-distributing an already impossible business environment – GIVE ME BACK MY BUSINESS AND TURN TIMES WILL NOT BE YOUR PROBLEM.
    3. Appraising is NOT that difficult or complicated – stop pretending it is something it is not.
    4. 2007 you had too many Appraisers… WHY do you have to “recruit” them now? Because the job sucks as a career.
    5. Regarding the 3-5 cases nationwide of Appraisal Bias you still claim there is a problem “industry wide” instead of focusing on THOSE cases. “that were so far apart”. Disclose WHY there were so far apart!!
    6. Update to USPAP revising race and ethics – but of course.
    7. Barriers to entry – PAREA – or maybe it’s the AMC Business Model?? Which of course wasn’t discussed
    8. Selling new courses…. TAF is re-opened for business selling books and education
    9. Fair Housing Training is NEEDED for ALL !! Otherwise potential for unnecessary appraisal bias.
    10. Entire program was about how to train Appraisers on bias and how they can profit on selling this “education” – and they admit that it has always been addressed with USPAP from the beginning.
    11. When asked what resources were available to help Appraisers avoid being overly litigated on this issue – they obviously had not thought of this issue at all – just join an Appraisal group and pray they say
    12. THEN – they promote ENFORCEMENT of bias to use as EXAMPLES to scare the rest of us into complying ??!!!
    13. Brookings Institute – what people do to ‘whitewash” their house is abhorrent?? Whatever…..
    14. Appraisals in question weren’t close!! WHY!!???? What did the reviews of these “appraisals” reveal?????
    15. Appraisers have to “modernize”!!! No examples – just that we are old and stoopid – Truth is it takes me as long now to complete a report as when I was using film, no MLS and forms and worms. IT’S SCOPE CREEPS not lack of using technology!!

    • Baggins Baggins says:

      I’ve been printing recycled paper on 15 year old workfiles. I have old forms and worms sketch pages, those were the days. Yep, your observations were as expected, predictable and apparently scripted to appease radical activists and non profits. That’s what the TAF does, pander to non profits these days. Like minds raking unearned income and bypassing legislative intent tend to stick together. I wonder if they’ll include Dispatches from the Cosmic Cobra on their suggested reading list. These people will remain detached from the realities of the majority of every day average working appraisers until the end, that’s probably the only thing we can count on.

      • Avatar Turner says:

        The developments in section 8 that I refer to were when you could purchase the house with low interest, Nixon ended that program.

        If you qualified you got a 1% interest rate. If you sold early, before the mortgage was sold off, you split the difference in the profit with the program if you held it for all 30 years, it’s yours. It was a great program, put lots of people in houses. Unfortunately these developments are still stigmatized. It’s not the street or the side of town. It’s a shame though.

    • Avatar Frank Wilson says:

      I’d bet all my money that almost all “bias” comes from pressure from clients, laziness, or lack of knowledge. If someone were to “lowball” minorities they would lose clients. Even doing appraisals to market value can cause appraisers to lose clients that want us to put the highest number conceivable (which is not market value). to push through deals. If lender clients get rid of appraisers who do their job correctly in favor of unethical target hitters you are going to have problems and those market value appraisers are going to get accused of bias for appraising it lower than the target hitter. Add in that PAVE claims using comparable sales in the same neighborhood advances segregation and redlining and appraisers are whiplashed around from various sides, some will hit them for a credible report while others will hit them if they cowtail to others trying to influence them in government.

      • Baggins Baggins says:

        AVM promoting tech companies will eventually reap what they have sown. Reduced service appraisal modernization pundits will only realize the err of their advocacy after negative results are brought forth under new systems. Rule of thumb to successfully navigate appraisal valuation services; 1. The commission based participators are almost always advocates of the seller. 2. Understand that unless there is a defaulted status, the buyers are subject to the will of the sellers by way of commission based interests as sellers demand higher prices while buyers would request lower, otherwise if in default, subjected to the will of investors and note holders. 3. Regulatory activities revolving around valuation practice are directed by advocates of the seller. 4. Every refinance application is that of a seller whom appeals to resell their mortgagee interest in said real property. 5. Principal of substitution has taken a back seat to the principals of investment profits.

        From an appraisers perspective, we need to shift the notion of retaining clients to that of retaining a complaint and claims free record. Sadly, many appraisers would be incapable of achieving that goal, having long since been subjected to complaints and claims. Who’s still buying the appraisers are racist nonsense? More like appraisers are not your personal advocates. Cry me a river. It will be nice to take a dip in the cool refreshing waters. This job is not for everyone, especially poorly suited for social justice advocates. Get your mind around contract law. These people signed their names on the line, the consequences of such investment decisions are theirs and theirs alone. No take backs.

        Article 1 Section 10. No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

  14. Avatar Z says:

    I am confounded by the declarations of appraisal bias based on personal items in a home. I can tell you how a home was built, the finishes etc for a home I saw 10 years ago but couldn’t tell you about a single personal item in a home I saw last week.That’s not what an appraiser looks at. We may remember an oddity or cool collection if we see one but that’s about as far as it goes.

    When looking for comps no one is looking at race. Sales data does not have an ethnicity. As far as those saying using comps in a lower value neighborhood keeps a home’s value down, it defies common sense. Going outside a neighborhood to specifically hit a “higher” value is fraud plain and simple. We cannot control what data the tells us. If homes in 1 neighborhood sell for 100k and in another sell for 200k there is a measurable difference for a reason. Safety, quality of home, school district, access to employment, transportation or amenities (shopping, parks, etc). The reasons are there and have nothing to do with race.

  15. Avatar Pete says:

    Purchase.. CA.. Owners removed the stairs and created 2 units, one only accessible by climbing the hill next to the home. No permits. AMC called bias when I reported in the appraisal. Large client of mine.. Never heard from them again. AMC’s are a bane on the industry and do exactly what they were supposed to eliminate. Don’t get me started on the fees to the consumer.. Sad days..


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All This Will Do is CREATE BIAS!

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