Low Appraised Value = Racial Bias?

Low Appraised Value & Allegations of Racial Discrimination

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
Latest posts by Dave Towne (see all)
Dave Towne

Dave Towne

AGA, MNAA, Accredited Green Appraiser - Licensed in WA State since 2003. Dave Towne on e-AppraisersDirectory.com

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35 Responses

  1. Scott Taylor on Facebook Scott Taylor on Facebook says:

    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.

  2. Wyatt Powell on Facebook Wyatt Powell on Facebook says:

    Some of the verbiage in this article is completely inappropriate.

  3. Gregory Beck on Facebook Gregory Beck on Facebook says:

    Actually they are bigots against appraisers. Not buying their BS

  4. Avatar dale bailey says:

    From the masses—–chirp, chirp, chirp

  5. Avatar ej says:

    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.

  6. Avatar JD says:

    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.

  7. Avatar Seneca says:

    You knew it was Dave Towne. Beat this topic into the ground. Geesh

  8. Avatar Bonafide says:

    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!

    • Avatar Joe says:

      “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.

      • Avatar Bonafide says:

        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.

        • Baggins Baggins says:

          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.

          • Avatar Bonafide says:

            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.

            • Baggins Baggins says:

              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.

          • Scott Taylor on Facebook Scott Taylor on Facebook says:

            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.

            • Baggins Baggins says:

              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.

            • Avatar Russell says:

              I often search for sales before accepting an order depending on the type of financing such as FHA or USDA. For FHA and USDA the first three sales must be within one year of the effective date no exception. The area where I live has a 45K acres lake that covers two states and four counties. Moving further in distance away from the lake would not be credible for my reports. If I cannot find sales then it does not make any sense to accept the order. Where the purchase price is way off or unreasonably way off and no sales range to support the contract price it becomes a potential risk of your being accused of unjustified things depending on the parties involved.

              • Baggins Baggins says:

                No exceptions allowed to a one year sales rule would be an assignment condition imposed by the lender. Within various GSE selling guide and handbook information, no such strict demand is imposed, although the suggestion is that if possible; more recent sales are preferred. Market trends by time perhaps?

                • Avatar Russell says:

                  You are talking about Fannie Mae guidelines.

                  Are you on the FHA Roster? Do you complete FHA and USDA appraisals? FHA and USDA use Fannie Mae guidelines along with other strict restrictions.

                  FHA HUD guidelines state “Comparable sales should not exceed 6 months from date of sale and, in no cases, may exceed 1 year from date of sale in the first three comparable sale positions” This is not a lender imposed rule.

                  • Baggins Baggins says:


                    Control+F for search feature. Keyword; comparable / 107 specific word match results, then use the nifty little arrow up down tool next to the control F data entry bar, to bounce to every single instance of ‘comparable’ being used in the handbook.

                    In order of results; For new construction, must have one sale within complex, one from competing. Must not be dated sales if more recent sales are available, some other stuff on manufactured housing comparable guidelines, some data on appropriate adjustments, maps presentations guidelines, concessions adjustments, sales verification data validation, land related, rental related, appraiser must provide sufficient analysis regarding comparable selections, specific criteria for better matching of feature for selected comparables, foreclosure sales may not be indicative of market value, three approaches to value, must be reflective of market value, comparable selections in diverse markets, pud, rural, And then this one, possibly related to what you are talking about;

                    (f) Comparable Sale Selection in Rural and Slow Growth Markets
                    If insufficient comparable sales have occurred within the previous six months,
                    the Appraiser must include at least three sales that occurred less than 12
                    months prior to the date of appraisal.
                    Where there is a scarcity of recent comparable sales data, the Appraiser may
                    include sales older than 12 months as additional sales in markets. The
                    Appraiser must report the most recent and relevant sales, and include a
                    thorough explanation of the market conditions, the levels of supply and
                    demand, and a reason for the lack of recent sales data
                    In changing markets with Increasing Market or Declining Market trends, the
                    Appraiser must include an absorption rate analysis, at least two comparable sales
                    that closed within 90 Days prior to the effective date of the appraisal, and a
                    minimum of two active listings or pending sales on the SCA Grid (in addition to
                    at least three settled sales). If the Appraiser cannot comply with these
                    requirements due to the lack of market data, a detailed explanation is required to
                    support the market trend conclusion and include all data and analysis used to
                    identify the current and forecasted market.

                    And then we close out with a lot of manufactured and mh advantage material.

                    If dictates for appraisal performance are not in that hand book, they are not GSE policy but rather a lender specific policy. And you know how they all do it though, just copying guidelines from each other and nobody bothers to actually search the handbook. So yes, the specific requirements you mention are only lender based rules. They are smart and sensible approach goals for every appraisal, but if they are not available you can fall back on actual hud guideline material and exceptions, just share the link and specific wording with an underwriter if challenged.

                    To answer your question specifically, been doing hud appraisals for a long time but usda actually never, there is simply not much of that here in suburbia where I live. But if you’re talking va circulars, fha handbook, the fannie selling guide, some differences but they’re typically pretty similar; Do the best you can, there are some specific requirements for some situations, but knowing the appraiser does not create the market, there are variety exceptions where one can adjust for time, provide extensive supplementary analysis to qualify the older scarce sales and scale them back to current market with defensible adjustments, etc, etc. Appraisal mix and matching comps is allowed regardless of age and it’s a rare situation where you can’t get those one or two sales if in declining market or new construction, etc, but even then there may be a way around that with expanded distance research.

                    Nowhere in the hud handbook does it say; in no cases, may exceed 1 year, at least from what I could see with that one specific keyword research. You could search those terms yourself if you like but I know already, you in all likely probability will not find anything. I’d bet you’d find that in the lenders lengthy underwriter guidelines for origination documents though, often half as long or even as long as the handbook itself. The lenders often seek slightly more restrictive compliance terms for their marketability of the paper after origination. But if they choose to attempt to originate in the limbo zone between their rules and the official gse rules, the market conditions, sales availability, and home character issues are outside of the appraisers control and why the exceptions exist.

                    If you have an actual specific reference for what you posted above, take a screen clip of it and post a link. Otherwise; That’s a lender imposed guideline not HUD. You can use sales older than a year, IF no more recent or relevant sales exist. If an appraiser finds themselves in that limbo zone while completing an appraisal, the scope of work needs adjusted and the lender will have to allow the exception to their own stricter rules, or if they refuse to do so, they have created a situation where the appraiser must withdraw, for being unable to provide credible analysis under overly restrictive lender imposed guidelines. And that’s when the appraiser lectures the lender on how defining scope of work absolutely must include appraisers participation, otherwise they are free to shop around and see if any less knowledgeable appraiser is willing to work under their terms. Won’t change the market though. Exercises in engagement futility from big box lenders, as they’re the ones whom want cleaner paper in mass volume. That’s the rub with lenders too, the one thing they’ll never tell a customer, is that the lender across the street may have more flexible rules or different programs that are a better fit for the customers specific needs. So they try to hammer a square appraisal through a round hole instead. It’s the ‘we’re not making widgets on a production line’ argument.

                    It’s been a while since I went through that exercise, have not had to battle any underwriters lately. But if you do, just turn to the snipping tool, copy paste, and control +F search tool.

                    • Avatar Russell says:

                      https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh/4150.2 Go to bottom of page and click on Appendix D. then go to page D-6 of the appendix.

                      Below is a portion from HUD APPENDIX D: VALUATION PROTOCOL. I use the HUD site often. It is not so easy to navigate. Thanks for the tip. I have taken the FHA course from approved schools and the last class I took was in 2021. They said the same information. Have not seen an update where this rule was changed.

                      Rural properties often have larger lot sizes and their locations can be relatively undeveloped. As a consequence, there may be a shortage (or absence) of recent comparable sales in the immediate vicinity. This may cause the appraiser to select comparable sales that are located a considerable distance from the subject property. In those instances, the appraiser must use his or her knowledge of the area and apply good judgment in selecting comparable sales that are the best indicators of value for the subject property. In these situations, the appraiser must include an explanation of why the particular comparable sales were selected.

                      Only closed (settled) sales may be used as comparable sales 1, 2 or 3. If a sale is over six months is used, an explanation must be provided.
                      No sales over one year old are permitted except as “additional comparable sales” and would be identified as comparable sale(s) 4, 5 or 6.
                      Properties under contract may be also be submitted as additional comparable sales 4, 5 or 6 to support trends or value conclusions observed.

                      FHA, VA, Conventional or cash sales are acceptable as comparable sales.

                      Thank you for the information.

                      • Baggins Baggins says:

                        See I’m so old, and because I hardly even care anymore, I’m on the older handbook. Ha!

                        Sorry about that. Things to be aware of if there are no sales though.

                        Thanks to you as well.

                        • Avatar Russell says:

                          Hey, this is what I like about this site. We can inform, share, vent and express our opinions. Any way we can help each other is a very good thing.

                          • Baggins Baggins says:


                            Was thinking about that. I thought 4000.1 was king.

                            Check your dates on those documents. I’m thinking a lender is still claiming those older rules as HUD requirements, when due to the updated selling guide, now those have merely become lender requirements and HUD now allows exceptions.

                            When I run into conflicting guidance, sometimes the solution is as simple as calling into the local HOC and speaking to one of the people. If requested they can send you policy or guidance clarification via email which the appraiser can forward to the lender. Just copy them the 4001 data like I posted and that should be good enough. And there are variances for manufactured vs stick, and many others, so it’s never just one rule fits all scenarios.

                            Access Housing Handbooks superseded in full by Single Family Housing Policy Handbook 4000.1 (SF Handbook)

                            That’s the current top line statement on the HUD site itself, just go with that.

  9. Avatar Coach says:

    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”

  10. Avatar Appraiser of the West says:

    ***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.

    • We encourage lively conversation but we do insist that you follow our guidelines. Threats, the use of hateful language, or personal attacks is a violation of our guidelines. Your comment does nothing constructive and is off topic. Using our blog to attack someone anonymously is a form of cowardice and is not permissible. Going forward, your comments will be moderated before being approved.

  11. Baggins Baggins says:

    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.

  12. Avatar Laydee Tee says:

    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.

  13. Baggins Baggins says:

    What’s happening in South Africa right now is important to consider.

    Please allow me to illustrate what REAL inequality looks like.

  14. Avatar Praveen says:

    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.

  15. Avatar D says:

    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.


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Low Appraised Value = Racial Bias?

by Dave Towne time to read: 2 min