Is There Systemic Racism in Appraising?

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Is There Systemic Racism in Appraising? Where is the Evidence?Brian Stevens of NREP questions why no evidence has been put forward to support systemic racism in appraising. He proposes that a comprehensive non-partisan study of the industry be conducted before labeling an entire industry with easy and cheap terms like “systemic”.

So we have all heard the story about systemic racism in residential appraising. There have been a handful of cases where it’s been determined that appraisers have brought appraisals in low based on the homeowner’s race. Now I don’t know if this is true and you don’t know if this is true. We don’t know the value, the comps, the adjustments, the neighborhood or the appraiser. So for me to chime in and say that these appraisals had an inherent racial bias would be foolish. I simply don’t know. It is one of two things right? Either they did or they didn’t.

Now here’s what I think. When we use words like systemic, that means that the entire residential appraisal profession has a racial bias. For me this is a fairly new topic. I haven’t heard about it in appraising as far as I can tell. A portion of our industry has decided that systemic racism and appraising exists based on three fairly well-known cases. Again I don’t know the details. My thinking is this though. I think it’s irresponsible to use words like “systemic” or make accusations about an entire industry where individuals who may be pure of heart are accused of deeds for which they are not guilty. Perhaps. Question: Were these bad appraisals? If they were, were they isolated or is this systemic? What about other appraisals that consumers, lenders or realtors disagree with of clients that are of other ethnicities? Do these bad appraisals carry an inherent bias or are they just bad appraisals or are they the right appraisal and you just don’t like the value? Again I don’t know and you don’t know.

My thinking is this. Before we pigeonhole an entire industry with easy and cheap terms like systemic, a word that is wildly misallocated under the circumstance, a word for which there is zero evidence to support, I would suggest that our industries start with a word like comprehensive. Is there systemic racism in appraising?

Let’s find out. Let’s conduct a comprehensive non-partisan study of the industry as a whole. Then and only then can we draw a conclusion and make the corrections if it is determined that they are needed in the first place. Until we use terms like comprehensive, casting judgment, making accusations feel more partisan and agenda driven than anything else. Again please hear what I’m saying. Keep the knives in your belt and out of my path. I’m just saying, let’s find out before we find fault.

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11 Responses

  1. Avatar Dennis T. says:

    I have never experienced, seen, reviewed, heard second-hand or even heard a rumor of a racist appraisal in my 30-year career.

    I have an idea. Have appraisers, or do it on our own, put a statement in every appraisal in which it pertains (mostly purchases) “I attest that I have not been made aware of the race of the borrowers for whom is the client for which this appraisal is being performed.”

  2. Avatar Pat Turner says:

    Thank God for good sense!!!!

  3. Herb Martin on Facebook Herb Martin on Facebook says:

    Is There Systemic Racism in Appraising? No

  4. Avatar Seneca says:

    Since over 70% of appraisers are one person shops it doesn’t really give us an opportunity to conspire to be systematic on anything. For good or bad. So there. That’s the results of the “comprehensive study”.

  5. Avatar Don Orttenburger says:

    As an appraiser (certified general-31 yrs) I was subject to this accusation earlier this year and received my first ever letter of doom (e-mail) from the state requiring my work file, copy of the appraisal and a reply/rebuttal. Part of the e-mail from the state (Michigan) contained the borrowers complaint and a copy of a 7 month old appraisal on another unit in the 5 unit (100year old) 3 story townhouse complex. It seems that the other unit was valued at $350,000 and my value was $290,000, and most important to my borrower was that the other owner was white and she was black-clear proof of racism in her mind. My response was that the earlier appraisal used comps 3-4 miles distant in a higher value downtown market and also included (and I believe gave significant consideration to) the a similar unit located across the street from my subject that was an active listing at $360,000. My appraisal used 2 sales within 1/3 of a mile, 1 sale 1.9 miles distant and most importantly used the same unit across the street that had just closed the week before (deed confirmed through the county) for $300,000. That and a history of working with minority banks over the years resulted in a response 6 weeks later that the state found no violation and were closing the file. It seems that in this day and age, guilt doesn’t matter-if I don’t get want I want, that that is proof of wrongdoing.

  6. Avatar Jason says:

    Appraisals are based on the most recent suitable substitutes, as close to your subject that are available. It is not based on skin color. The closest, most recent, most relevant sales available.

  7. Avatar l fortin says:

    And more blah, blah, blah on racism this and racism that. My goodness people… the only reason racist comments are “thrown about” right now is certain entities in this country have nothing else to say. And this doesn’t help to unify this country. I must admit I thought that there is no way this could ever infiltrate our business. How wrong can I be?? AND who is going to be paid for doing this “study”???? AND by whom?? And then a study to study the validity of the study…and on and on….

  8. Avatar Eric Kennedy says:

    Thanks Brian, for speaking some sanity. I’m not sure what the agenda is for these people but it is obviously nefarious (Wicked in the extreme; abominable; iniquitous; atrociously villainous; execrable; detestably vile.) against Appraisers and our duty to try and protect the public trust. Sorry, it’s the Eagle Scout in me. Give us some facts and let’s talk about it… as Brian wrote… “Now I don’t know if this is true and you don’t know if this is true. We don’t know the value, the comps, the adjustments, the neighborhood or the appraiser.”

  9. Avatar we the people says:

    Responding to such absurd “woke” fabrications legitimizes their absurd arguements. Ignore and reject such nonsense. It is an effort to divide and destroy and seize control to perpetrate the same things that they accuse the innocent of doing.

    Don’t waste another second on those comminists.

  10. Jason Jake Martin on Facebook Jason Jake Martin on Facebook says:

    Well, across the street sold for this and one down the road sold for that, there’s your market.

  11. Avatar JohnnyQ says:

    Who’s the one asking that when photographs or paintings, or persons show up in photos, their images be blocked?


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Is There Systemic Racism in Appraising?

by AppraisersBlogs time to read: 2 min