Low Appraised Value = Racial Bias?
When the appraised value didn’t meet the sale price, the first assumption was that the appraiser conspired to lower the appraised value based on ‘race’ only. When interviewed by the TV reporter, the appraiser (off camera) was incredulous about that accusation…
I’m getting tired of accusations of race bias in appraisals, which ALL have alleged the ‘low appraised value’ is caused by the presumed built-in systemic racial bias of the appraisers involved.
Here’s another one: EXCLUSIVE: Former Stockton Mayor Michael Tubbs fights home appraisal he says delayed the sale of his house – ABC7 San Francisco (abc7news.com)
Even the President of the Appraisal Institute, when interviewed, can’t even bring himself to offer a different perspective of what may have happened, that being improper comparables were used which resulted in a lower than anticipated value. He just agrees with the assumption that ‘we’ are at fault because ‘we’ appraisers are filled with improper biases. And just you wait, the AI organization will design classes to teach people not to be biased. Tune in at the 11 pm newscast to see if these will be effective.
This fact (potentially improper comps), in case you have not been paying attention, is the key ingredient in all the media blasts targeting the appraisers, and by de facto association, ALL APPRAISERS.
In the case above, the sellers presumed the SALE PRICE as agreed to by the buyer was appropriate, and that the appraisal should support that figure. The TV reporter even quoted Zillow’s value, which we all know is highly accurate… NOT. When the appraised value didn’t meet the sale price, the first assumption was that the appraiser conspired to lower the appraised value based on ‘race’ only. When interviewed by the TV reporter, the appraiser (off camera) was incredulous about that accusation. Do we even know the ‘race’ of the appraiser? NO.
All this junk about ‘race’ is planned strategy to support ‘wokeness’, critical race theory, and other tactics to support a singular message – that “whites” are the worst people walking the planet. It started several years ago, and now has reached crescendo pitch – largely because a primary person high up in the government food chain has decided to make it a priority.
So far, all we’ve had is accusations based on ‘feelings’ and the built-in BIAS of the aggrieved party, with no actual basis in facts. There have been no critical technical reviews of any of the reports provided as ‘the rest of the story’ to see exactly what was done by the original appraiser.
Maybe what should be done is with any assignment where the ‘presumed’ property owner is someone of dark skin, the appraiser should just decline the order. Maybe we should ask that question up front, “hey, are you a different color than I am??”
Seems to me that’s the only way to avoid being labeled as a systemic racist appraiser.
Because that’s how ‘we have’ been labeled so far. And it’s not going to end any time soon.
Dave Towne on e-AppraisersDirectory.com
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I might even attend one of the classes just so I can hear for myself the lunacy being taught. Now that will be entertaining and disheartening at the same time.
Some of the verbiage in this article is completely inappropriate.
Thank you. I can’t believe anyone published this rant. If people thought appraisers were racist before they will feel certain of it after reading this thing.
That’s Dave for ya,
https://appraisersblogs.com/media-twisting-n-creating-a-false-picture-what-was-said-at-the-save-america-rally
He still thinks the media was the ones that were doing the wrong
It’s all spin, regardless of which side you are on. An ‘indisputable fact’, and stuff. Creative writing is always worthwhile, fact or fiction, still entertaining.
Too few of us are calling this out. Thank you
Actually they are bigots against appraisers. Not buying their BS
From the masses—–chirp, chirp, chirp
Why are appraisers still members of the corrupt Appraisal Institute? All these people care about is hoarding money for their board directors and getting filthy rich off their members.
Yea, lets see how fast I take a Class about this. It’s time to speak up. I am sick of all the racist in our Government. Pushing a false cause. It’s ok to have ALL OF THE “People of Color” originazition, but if we have a white originazition, it”s somehow racist. Discrimination works both ways. Like Morgan Freemen says, “you want race issues to go away, quit talking about it.” Can you immagine if we had White Entertainment TV, NAAWP, Ms White USA, ect… BUT WHITE PEOPLE ARE RACIST. I appraise property based on comparable sales, not skin color. Good and Bad in all races.
You knew it was Dave Towne. Beat this topic into the ground. Geesh
I canceled an appraisal after I met the listing agent at the property who mentioned that both the sellers and buyers were black. After inspecting the property I knew the appraisal would not support the contract price. I called the client and explained that I was withdrawing from the assignment for fear of being accused of racism if things went south and I couldn’t support the contract price. They said they understood and that I was not the first to decline assignments where the value is an issue and one or more parties involved is black.
Makes me wonder if the listing agent mentioned the race of the parties involved to pressure me to make the deal work!
“I canceled an appraisal after I met the listing agent at the property who mentioned that both the sellers and buyers were black.” So, you cancelled because they were black. At least you admit it. Time to hand back in your license.
You missed the rest of my post! I canceled because I knew the appraisal would not support the contract price.
“After inspecting the property I knew the appraisal would not support the contract price. I called the client and explained that I was withdrawing from the assignment for fear of being accused of racism if things went south and I couldn’t support the contract price.
They said they understood and that I was not the first to decline assignments where the value is an issue and one or more parties involved is black.
Makes me wonder if the listing agent mentioned the race of the parties involved to pressure me to make the deal work!”
Let me make it simple to understand. I had 3 choices: 1/ do the appraisal, deal with angry parties for not supporting the contract price and possibly be accused of racism and be investigated for bias; 2/ inflate the value and violate USPAP; 3/ cancel. I canceled.
Perhaps next time comp search more thoroughly before accepting the assignment? Wouldn’t driving the price down be a favor to the buyer?
The articles in question involve a 400k renovation project for a home on stilts with an unnaturally gained 1,000 sq ft addition, by sandy beach slope, and a fsbo purchase pre reno which may not have had an independent value check in the first place.
Never feel sorry for someone whom is dealing in the millions.
This was a newer construction resale not listed in the MLS. Houses similar to the subject with minimal options sold $70-100k less than those with superior upgrades. Subject had minimal upgrades. Also subject backed to another house while aerial view showed a wooded lot (pre-construction). No way to know this unless I inspected the subject. Client was not an AMC, no rush in accepting the assignment, no bidding involved. We all know comp searches are just that. Until you inspect the property, you won’t know for sure if you really picked the right comps.
And yes one would think that buyers would want to know if the house they are purchasing is worth what they are paying for but we know that’s not the case, specially in my market, where there is a low supply of new listings. Potential buyers offering over asking price and getting into a bidding war is the norm in my market.
Sometimes you get into these things and then the home itself changes your hopeful opinion, it comes with the territory. With sales it can be especially difficult. We have one of the least rewarding and most challenging jobs in real estate.
The appraisers are racist approach is just another in a long line of slanderous accusations pushed at appraisers over several decades. I think it’s better than being the cause of the housing meltdown. The current baseless accusations are actually a little lean compared to the past. I’ll get worried when they say, well, I’m not sure, but I’m not worried yet.
So you are saying we need to do a more thorough comp search BEFORE accepting the assignment? So we got rid of pencil searches but replaced them with the appraiser having to research the property and find comps just to make a decision if he or she wants to accept it. I understand looking at a property that could be on the high end to quote the fee properly but not just to see if it will make value. Is everyone researching comps for all appraisal orders before accepting because I sure am not.
If you accept anything, there is a higher probability of complaints and claims, eventual higher insurance bills where the raised premium never rescinds. Run into the aggressive agents if you feel comfortable dealing with them. If possible, I avoid the conflict. Yes, before. And yes, many appraisers do that, leaving the appraisers whom will accept anything left dealing with it. I don’t cherry pick but I will turn down grossly overpriced sales, it happens now and then. And there is a benefit of precursory market review which can go into the workfile and help with the excess emphasis on time, like to schedule within a day or if you just need quick reference material. It’s only a comp search.
I saw this comment on linkedin and thought that’s exactly what’s going to happen. The comment above is proof that it is already happening.
“The contract price is not supported by recent sales and the value opinion will likely be lower than the contract price.
Based on that, I cannot accept the assignment because I don’t want to be accused of racial bias when the value comes in low. Additionally, I don’t want to be black listed by a real estate agent, or be turned into the state by a disgruntled seller for not producing the contracted price in the appraisal.
Welcome to the new world of appraising”
***This comment was edited by AppraisersBlogs Team. Personal attacks are not allowed within the context of this blog.***
I’ve mentioned before, why have you avoided the subject of “blockbusting”? It could be that you simply don’t know what “blockbusting” is but more likely “blockbusting” undermines your central thesis. “Blockbusting” and how it relates to the appraisal profession is indefensible so it is better simply to not talk about it. I can understand.
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Although not coded in race, it is just a fact of the real estate market that there are multitudes of predatory interests whom will prey on anyone and everyone however possible whenever possible where ever possible. They call it slam dunking. Did you know that there are people whom pay cash for houses, and you won’t even need to pay for an appraisal!? It’s your lucky day.
Generally speaking, if a person is licensed, a difference of opinion is just that, a difference of opinion. Just deal with the fact it does not always work out, try and try again.
Genius really, the news people monetizing peoples misunderstanding of real estate value development process, a misunderstanding which is more common than not. There will be a book, a guide, a seminar, and a consultant you can hire to help navigate the racism inherent in the agents whom represent you, and the appraiser functioning as the consumer protection mechanism on your behalf. What nice homes.
First, I’m not entirely sure that this “blog post” discussed the issue at hand and stayed on topic. But that’s up to the Appraisers Blog Team to decide.
As for declining an assignment based on the homeowner’s race, that issue has previously come up in other blogs.
I believe the core issue is one of Appraiser Independence.
How many of us have arrived at a property to have an agent or homeowner make comments that caused us to reconsider whether we should proceed? Comments regarding a “number needed”, comments that seem confrontational, comments that call into question our qualifications or competence? I know I have left a property only to contact the client from my car to withdraw, as I felt like no matter what, my report would most likely be challenged, maybe even reported to my appraisal board, and because of those comments I could no longer do my job in the “neutral, unbiased way” I always do.
The point being that race of anyone in the transaction is NOT a value factor…just like the “number needed” is NOT a value factor. So why would anyone feel the need to bring it into a conversation, unless they intended to make it a factor?
Honestly, I have never thought about race in any way as I go about my job…until now. The way that this issue has been placed squarely on the shoulders of Appraisers has made us ALL have to think about it…possibly in ways that will restrict our ability to continue to do our job as the one person in a lending transaction that is NEUTRAL.
If I withdraw from an assignment because of Appraiser Independence issues, does that mean that another Appraiser after me may be less experienced or less qualified? Perhaps. And how does that benefit anyone?
Aren’t we all after the most qualified Appraiser? Will this issue make a non-black Appraiser less qualified to appraise the home of a black homeowner? Isn’t that being racially biased?
I’m sure we all as Appraisers have been almost “brainwashed” (for lack of a better term) to be “neutral, unbiased, and not an advocate for any party”. At least that’s what I was trained to do.
I’m not claiming that none of these complaints about appraisals are accurate, they may very well be. But it appears to me that no one is listening to both sides of the argument in order to accurately determine a course of action.
That’s what I’d like to see happen. And in the meantime, if comments are made regarding race in any way during the course of an appraisal, it just may cause the Appraiser to respectfully withdraw. Not because they are racist, or because they are biased…but because they feel they can no longer be that “independent, neutral” voice that we have always been counted on to be.
What’s happening in South Africa right now is important to consider.
Please allow me to illustrate what REAL inequality looks like.
Why are appraisers still members of the corrupt Appraisal Institute? All these people care about is hoarding money for their board directors and getting filthy rich off their members.
Speak for yourself: This company is ‘NOT” Bureau of Better Business, accredited, read their comments before considering this company: An appraiser from this company
appraised my property with the lowest value possible. Prior to appraisal, I had search the surrounding areas and visited some of the newer upcoming communities near by…finding that my property was comparable to the properties starting at 300k.