Damned If You Do and Damned If You Don’t
Damned if you do, damned if you don’t has become the new normal in the real estate appraisal profession.
The government and those that write the rules have made it illegal (a punishable violation) to refuse an appraisal assignment in an area which consists primarily of non-whites.
The government and those that write the rules also state the purpose of an appraisal is to determine the value of the home/property in its market setting, so an underwriter can make a lending decision. Back in the day, this protected the lender from lending more than the home/property is worth. It also protected the borrower from paying more than the home/property is worth.
Now, in the 21st century, the same government and those that write the rules are telling the public “if you don’t like the value, turn the appraiser into HUD!” And there are those out there that give less than a damn about the appraiser’s lively hood. It’s all about getting the loan. When the appraiser does their job as required by the government and those that write the rules, and the number falls short… the borrower “Plays that Race Card” just like Ms. Fudge and her PAVE cronies have preached for the last two+ years.
So, appraisers, as long as you remain in the profession, regardless of whether you’re appraising for lenders or doing non-lender work, the government and those that write the rules have planted the seed. In today’s world, every time you walk out the door for an assignment, you risk the excruciating pain of being called a racist and being turned in to HUD, VA, or whomever.
Yep, you’re damned if you do and damned if you don’t, and the government and those that write the rules could give less than a damn. And sadly, I don’t see a single appraisal organization out there standing up for the profession. It is indeed very sad times in the real estate appraisal profession.
https://firstliberty.org/cases/alaska-airlines/
Picked that up from Consumers Research website.
https://consumersresearch.org/
What happens in the appraisal industry as everyday practice is often subjected to federal lawsuits elsewhere.
We can refuse to bid on it or refuse to accept the assignment, right? I will refuse an assignment if the property has major issues or if it’s listed way over market value. You just know no one will be happy with your value if it’s listed way over market. No appraiser needs that worry and stress for a few hundred bucks. We just can’t refuse to do the appraisal after we accepted it and inspected? I think we’re doing everyone a favor by declining so they can find a lender that will use waivers, AVMs or a crooked appraiser who is willing to appraise over market value to please the AMC, lender.
Any more we as appraisers have to very careful how we turn down an assignment; before I accept one I research the area/house/contract to see if it’s something I want to do, what I don’t want to do is ever be accused of anything wrong… that being said, if the subject doesn’t meet my criteria I tell them that I’m booking 3 weeks out at present, I MIGHT be able to have the report back in 4 weeks… works every time.
You might have gotten away with that a couple of years ago, but everybody knows how slow our business is right now. Be careful….
I’m not slow; I specialize in complex properties that no one seems to want to do, cover 10 counties and am a member in 5 MLS systems, my fee is according to complexity and I have all the work I can handle now, knock on wood, so I can honestly tell them I’m booking out at least 2 weeks now…
They can’t say that you refused the assignment if you quote a ‘broom fee’. I’m now quoting $800 across the board. That is the current VA fee for my state and it’s a defendable position. If they don’t like it, they should pay competitive fees similar to VA or they can kick rocks. That will weed out most of the garbage clients and AMC nonsense.
We had better watch our 6 when we accept assignments and get those homeowner ‘vibes’ and cancel the appraisal after inspection. If you say “I have a conflict of interest” or “I lack the experience/knowledge to complete this assignment” before the homeowner and client can use it against you for racism and bias.
Honesty is the best policy. Talk honestly to people about how much your fee was, how you researched the market, and what you thought of the home. If you research the property and it’s not working, tell the lender that directly. This does not comp out. Or I have researched this and think another appraiser would be a better fit for the benefit of the lender and the borrower, so I’ll pass on the order and wait for the next one. Building trust and providing reliable unbiased service should always be among the appraisers top priorities.
So, true!!!!! Very good point!
There have been many times I have declined engagements before inspections and after inspections. Many times I ignore ridiculous offers. My wife asked me “why are you turning down business?” I told her all business is not good business and all money is not good money. I have the right to decline or accept any business.” If they ever balk I tell them “my business, my license, my decision”. I will not allow anyone to intimidate me! Life is just too short!
I attended a USPAP class last week via Zoom where 6 1/2 hours of the 7 hr. update consisted of appraiser bias with the last 1/2 hour covering prohibited words. And yes indeed, the preacher vehemently proclaimed we are prohibited from turning down an assignment where there might be a perception of bias. Maybe the census tract reflects a larger percentage of the population to be a protected class. But there was no definition of a protected class provided, nor will there be. I’m female. Am I a protected class? My buddy has curly hair. Is he part of a protected class? Please don’t think I am diminishing or minimizing the need that at one time in our history there was a need to stand up for those that have been discriminated against. I have always respected other human beings, regardless of their heritage or color. But, I am a business owner. And if I elect not to accept an assignment in an area where I think I’m going to be thrown under the bus… even after the inspection is completed, I will walk away from that assignment before I put myself in a situation where I will take on any more liability so someone can get the house they want, the loan they want or close the deal. Old racial wounds were not reopened by this administration… newer, deeper PERCEIVED biases were created by our current political climate and I will not be a part of it nor will I ever again be victimized by it.
The idea is to eliminate the appraiser from doing the physical work, that way there is no possibility of bias. If you haven’t already done Hybrids or Desktop appraisals, that is where this business is headed.
They are working on biases class to be a mandated requirement apart from USPAP. It is coming.
‘proclaimed we are prohibited from turning down an assignment where there might be a perception of bias.’ The appropriate response; ‘Please point out where that specific guidance is located in the ethics book.’ The appraiser is always the final word on forming scope of work and accepting engagement requests or not. Sounds like the uspap instructor is confusing the difference between an employee and an independent contractor. One does not even need to give a reason to decline an order. No justification is necessary. Just say no thank you. ‘The rhetoric of No.’
Zoom, why would you even want to be recorded anyways, your image and questions recorded in some online database with infinite shelf life. Wait till that system gets hacked, going to be epic. If more people would read the complete terms and conditions before agreeing to use software. ‘Your likeness’ and recreations thereto, are no longer your own… I’ve got an old meme on that one.
Faux ethics educators, as if TAF even knows what ethics is anymore. They sure know how to force a captive audience to buy another over priced ethics book and pay for their over priced classes every other year. How to coordinate with non profits and lawyer groups whom actively pursue cases against appraisers. That they are very good at. Sign here.
They realize they have shot themselves in the foot by targeting Appraisers for bias. no wonder Appraisers are declining these left and right. They cannot have it both ways. I refuse to walk into a no win situation. It is either not in my coverage area (which I have the right to change at will as that is a business decision for me) or I am booked for a month. That makes them go away. Let them try to force me to conduct business the way I see fit!
Bravo! I am right there with you!
As much as I love adrenaline-fueled adventures, I have to draw the line when it comes to risking my life for a measly appraisal.
Sure, back in my younger days I was all for taking on any assignment, no matter how sketchy the neighborhood or questionable the client. But after a few close calls with drive-by shootings, crack houses, sex offenders and gangs, I’ve learned to be a bit more selective. And let’s be real, my black male colleagues refusing to go to certain areas in DC is a pretty good indication that it’s not exactly a safe neighborhood. I mean, I’m all for equal opportunities, but unless the government or client is willing to pay for my own personal army of bodyguards, I’ll be choosing which areas I’ll cover. Sorry, but my safety is worth more than a few extra bucks.
Safety first, people. Safety first.
This should be the attitude of any person regardless of their profession or color when it comes to their safety!
Amen!
As an appraiser who happens to be black. I use risk management in all of my engagements before and after inspection.
If I feel the engagement is not to my best interest I turn it down or withdraw from the engagement.
I do not care about reasonable and customary fees. My fee is my fee and I do not give a rats behind who they are. Take it or leave it. An AMC sent me an order for an apartment complex with 8 parcels and 5 buildings with a total of 20 units for $608.00. I quoted them a fee of $9,500.00. They asked me did I mean $950.00. I said no $9,500.00 was correct. Of course, the lender declined. My attitude is next!
I have been appraising in rural areas for over two decades. I have had a few clients question my credentials but I knew it was racially motivated by their tone or attitude. I tell them what is what about an appraisal and basic rules and guidelines we as appraisers are required to follow. I am always courteous regardless of their attitude. Afterwards, if I do not feel comfortable doing the report I will withdraw from the engagement. I refuse to let anyone regardless of their color, race, class etc. dictate who I am.
It is a darn shame how this profession is getting more risky, harder and unpleasant to do because of stupidity. I thank GOD I am able to pick and choose my engagements.
It is even more shameful that you have to be concerned about the color of your skin, race or the borrower color and status in this profession. We all are required to follow the same USPAP rules and guidelines, plus state and lender/client guidelines. Now it has come down to colorism and protected classes of people.
I make no excuses for my color and so should anyone else. This has gotten out of control and as a black person I see this as an attack on Caucasian appraisers. Sure we have bad apples of all colors as in any profession but to attack an entire race of people in this profession or any profession is shameful and is destroying our Republic.
If you are Caucasian and feel this is an attack on you then you are right! Even Stevie Wonder (blind person) can see this. This upsetting to me as a human being when injustice is perpetrated on anyone because of their color or race.
A big amen to all you said! Thank you!
There is talk of Ben Carson as (he who shall not be named) VP, and boy, that would be a breath of fresh air. When Ben was in charge of HUD, things moved smoothly, everyone was happy. I miss Ben Carson, he was awesome, fair, intelligent, ethical, and honest. We need more people like that in government.
https://archives.hud.gov/news/2020/pr20-001.cfm
His achievements at HUD. Note how he decreased homelessness, helped veterans, created meaningful jobs, approached problems with incentives for achievement rather than unfair color coded benefits to only certain groups of people type of policies or penalties for others, promoted better financial accountability, worked with DOJ to stop false claims rather than promoting such false claims. And on and on and on. Opposite of what is happening now. Ben we need you now, please come back. How different things would have been…
As a brother from another………..totally on point. A few bad apples caused Dodd/Frank. Now this? I am a part of the wonderful personhood of Appraisers!! We will rise above this!!
The obvious is what no one is talking about at all. Most if not all the bias and racist complaints are coming from refinances, not sales? It would be interesting to know the statistics on that. This is not to infer there are not bad people out here doing bad things only the dynamics between the two types of appraisals and the reactions of owners. It would also be interesting to find out what a property is being assessed by the local Assessor that, in my experience and area, are much lower than the actual value. Are the Assessors racist too or are they just ignored by the statics being used to beat up white appraisers? It’s so sad this needs to be a black & white issue, but it seems the political climate we live in perpetuates this discourse.
The racial bias complaint filed against me in Alabama was by the Seller (a man of color).
If you are at liberty to give information. What happened?
True, but they come from both. It is true assessors values are typically lower than fair market values. No one tells assessors that you have assessed my property too low. If they did their taxes would be higher. We complain when they go up on the value. It does not need to be a black & white issue. It is a made up issue that is costing unjust pain and anguish to Caucasians in this profession.
This is a complex assignment $1,200. Full stop.
I know the high crime areas in my area like the back of my hand. I have more money and I am 70 now.
I did tell a lender once that the fee was $1,500 and that I needed $800 up front before I went to that address. They asked why I needed up front money. I answered that I didn’t currently own a Kevlar vest.
From past experience, I thought I needed one.
Later that week another person was shot and killed on that street. No longer available for appraisals in that county- and that was twenty years ago.
When will they realize we are tired of nonsense?
Personally, I have run across squatters, crime scenes, a working meth lab, a dead body, dead animals, wanted criminals, unwanted advances, child abuse, and victims of human trafficking. I have been stalked, my life threatened, threatened with lawsuits over value, gotten injured and incurred medical bills over the condition of some houses. Yet I am still here.
Shall we even mention the number of times we have gotten ill because someone lied about the true reason they were home; every appraiser eventually becomes a germaphobe. Then came CoVid; they locked the government offices and banks while they sent appraisers into houses.
Most people in rural areas of the south who argue about the “value” problem are unaware that their “target” price is below the de minimis anyway. But hey, blame the biased appraiser who stopped your loan. Appraisers make great scapegoats.
Rant over, you good readers- appraisers that read to the very end.
Love the Kevlar vest comment. I used to work for Fannie Mae doing REO’s in downtown Atlanta until we came across 2 guys in the street getting ready to shoot each other. We were right in the middle of the 2. Left the area, went home and told Fannie, would love to do work for you but NOT in Alanta Metro. Too dangerous. That was years ago when they were not even on the BIAS train……they changed my area to closer to where I live and it was good for many years until REO’s dried up as the market improved.
Whenever I think I can’t go another day. I just watch another episode of Billy the Exterminator and remember that things could be worse.
How come I never get the ‘unwanted advances’? My handy metal cigarette case doubles as a form of bulletproof protection. But only if they aim perfectly for my heart. I could only be so lucky in this industry, to expire quickly without hardly noticing.
On the bright side, I’ve learned what that dotty grime on walls of abandoned houses most likely is; Roach sign. I was like, how could that even be there, and what is it, why is it everywhere except where pictures were on the wall? I watched a bug documentary and that’s almost certainly roach sign. Eureka! Finally some clear answers. Nobody else knew either and most simply wanted to not talk about it and forget they had ever been in there.
Who wants to go to the uppity locations all the time anyways. A good rule of thumb for appraisers; Try to limit your services to only neighborhoods you could ever hope to personally afford to live in yourself. Nobody even blinks at tens if not hundreds of thousands of dollars in hidden costs as origination and agency fees are buried in thirty year amortizing loan packages. But ask the people whom are supposedly making this major commitment to fess up an extra hundred or two out of pocket for the appraiser, all of the sudden everyone magically remembers how to negotiate and get thrifty. The life of an appraiser.
Good times, fun follow ups. Thanks.
A comment was made by an appraiser who is black; in this racially charged world I applaud his thoughts, I have been an appraiser for 20 years, a home inspector for 5, an evil “flipper” for 10 and a real estate agent, in other words I have been around the industry for a long time. I can’t believe we as appraiser have allowed our profession to be bastardized like it has; I always thought like most that the AI would stand up for us, by NO WAY…they just want to pummel us with new uspoop every 2 years and fine us if we don’t comply. I’m slowly transitioning to private work and currently specialize in complex and oddball properties (my fee is accordingly). I subscribe to six (6) MLS systems here in NY and cover 10 counties on a regular basis, staying overnight in a hotel if necessary…I don’t compete with the local form-filler appraisers for low fees or do blind appraisals (Hybrids/Desktops), if I don’t see it I don’t sign for it. It’s a shame though, I feel sorry for the recently licensed appraisers struggling.
Being from NY I never saw things as has clear as now. Our profession has been ruined. I grew up on Long Island which was segregated based on color from the 50’s or earlier. Segregation was prominent in the 60’s and 70’s. So were the school districts. Those areas which were not 100% white struggled. It was a big difference from buying a home in Freeport versus Merrick. I bought my first house in Freeport. Thats what I could afford. I was not biased. My neighbors were great. When I was young, I learned landscaping from a man named Glady. We would walk down to the Dunkin Donuts and peak through a window and watch a man make donuts. One day that man surprised us and gave us a dozen donuts and an upset stomach. Both men were African American. When I worked in my first real estate office my Broker of record tried to cancel a transaction because of color. He was already fined by the state department, $100,000. It was one my first contracts. I argued with him and realized I did not like doing sales. The deal went through since he realized that she was not as dark as she sounded. I had to quit. I went on to other things. On Long Island we used school districts to help define market areas. Is this biased. I don’t think so. Things have changed a lot there. Minorities can now afford the higher prices of homes. The values did not change in proportion to the earlier days. You still cannot value Freeport with Merrick or even Roosevelt. The homes that are closer in proximity to a subject property given the same similarities in style, condition and size were given emphasis. A man not of my color gave me an opportunity in appraisals. In the three weeks I spent with him I learned a lot. More than from the second one. When I worked in the Poconos, I had two appraisals that were questioned. One by a builder who said that Easton Pa (About 30 miles away) were getting x amount dollars. I told him to build houses down there that the lot values were higher also. The other appraisal I performed was in my backyard. The management company questioned my appraisal because there was a home exactly like the one, I was appraising about ten miles away built by the same builder. I had fifteen comparable sales under a mile, several in the same community. Might look different but looked the same inside. What would happen If i applied this now. I would not change a thing. Statically I can prove what I do without bias. Would I accept an assignment that may cause me grief. Hell no. I recently suffered a widow maker. Only 12 percent of the population survives it. I use my medical condition if they want it back in two days. Not possible where I am. the data sucks and needs to be carefully looked at because it quacks like a duck. There is no bias here. But there is bias around us in every color. There is bias in people that have more money than us. I march to my own drumbeat. Fannie and everyone else can take it where the sun does not shine.