Another “You’re Biased” Story
This story, titled “Black homeowners allege appraisal bias in Prince George’s County” is published by a TV station based in Washington D.C. The homeowners who were interviewed live or lived in Prince George’s County, which is immediately east of Washington D.C. Roughly 863 thousand people live in that county, including some who are pretty wealthy.
An interesting twist on one of the TV story interviews is the homeowners’ incorrect assumption that just because they SPENT 1.3 Million Dollars building their ‘dream’ house, it would APPRAISE for that amount. A comment was (paraphrasing) “we spent all those dollars buying nails to build this place, so we don’t understand why it didn’t appraise for what we paid.”
That, of course, is a common misconception. It’s that way in large part because, “we” in this industry, have done a poor job explaining to the public what an appraisal is, how one is done, and the factors that are considered in stating an OPINION of value for the property. There’s a disjointed disconnect between public perception and our reality.
Frankly, before I became an appraiser, I had no clue about anything appraisers do.
Somewhat helpful though, in the story covered by the TV station, there is a video showing an appraiser explaining to the film crew how on-site observations for an appraisal are done (see video below). It’s the first time I’ve seen this presented this way in a story related to bias. Kudos to him for doing that!
The other emphasis of this presentation is the common theme: “We don’t like the value you stated, so you MUST be biased.” And most of these ‘bias themed’ stories we’ve seen over the past year never present the appraiser’s side, which is actually understandable, because appraisers are reluctant to discuss property appraisals with anyone other than their client. But one-sided stories are not the whole story.
On the other hand, what some of the interviewed homeowners in multiple presentations this past year have said is, basically the appraiser involved appeared incompetent or uncaring about specific details which do drive value, and when confronted with factual info after submitting the report, refuse to consider modifications to the report.
Or in other cases, the appraiser GREATLY increased the report value opinion after getting a ROV request. One story said the value change was $100,000! Say what??!
And other stories have revealed the same property being appraised by two appraisers, with resulting value opinions vastly different. I’ve had first-hand experience with this in my own local area.
These issues strike at the heart of limited competency and observational skills, coupled with questionable analysis, which lead to incorrect value opinions.
Unfortunately, it’s hard to know if the appraisers associated with all the stories we’ve seen really are racially biased, as are the claims, or if they actually have competency issues in how they do their assignments. About the only way to find out is to obtain the appraisals and have field reviews done by skilled review appraisers.
Now, let me find that bucket of nails to finish building my new dream house!