New and Improved Year, New and Improved Appraisals

Blog Contributor [Demographic-based grouping], Fair Housing, Sellers 1 Comment

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Lee Davenport

By Lee Davenport

Happy 2022, real estate friends!

January is the perfect time to challenge yourself to see, stretch and grow your business.

Coach’s Challenge

This year I want to challenge everyone to identify and partner with real estate lenders and appraisers who actively use robust policies to prevent appraisal bias; and, in instances when appraisal bias may be discovered, they have contemporary policies in place to redress harm promptly. When asked what their appraisal bias prevention policies are, let’s opt for preferred lenders and appraisers who can clearly articulate them and even send you documentation.

You may be wondering why does this even matters in 2022 when fair housing has been law for over 50 years? Check out these two videos for more about this challenge and why it matters now more than ever.

 

Need a hint to get started? Curious as to who is tackling appraisal bias head-on and should be on your consideration shortlist?

To help you start this challenge today, here’s a bonus video featuring Paul Ryll of Oscar Mike Appraisals sharing how their new mobile app mitigates appraisal bias. Also, in this video, hear some tips from HGTV-featured, international broker with clients in more than 25 countries, Christian Ross with Engel & Völkers Atlanta.

I would love to hear from you. Give me a shout on Facebook, Instagram, and YouTube, or by visiting LearnWithDrLee.com. Download your complimentary (a.k.a. NO FEE but for a limited time, so hurry!) copy of my new book, How to Be an Anti-Racist Real Estate Pro. Want more tips from fellow real estate pros (like Leigh Brown, Kim Hayden, and Sarah Johnston to name just a few) to help you become even more resilient in real estate? Grab our new book, Resilient Real Estate Women, by clicking here. Want more of the best practices of our nation’s top producers? Grab your copy of the short read, Profit with Your Personality, and the classic, 5-star rated workbook, Plan to Win, to transform your real estate sales game plan. Or, get your “training on” with these on-demand classes.

Here’s to your success!


Dr. Lee Davenport is an Atlanta-based real estate coach who trains agents, teams, brokerages, and other business organizations on how to use today’s technology to work smarter. Join Lee’s free RE Tech Insider’s Club by visiting www.LearnWithLee.REALTOR.

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Comments 1

  1. As an appraiser and a broker for close to 30yrs now I can honestly say that appraisal bias does not exist and if could be objectively proven beyond a reasonable doubt then the appropriate state appraiser commission should be notified, and the appraiser should lose his license or certification as it is not just a violation of fair housing laws but a violation of uspap and its strict policy of performing all appraisal in an unbiased neutral manner.

    As the age-old saying in real estate goes it’s all about location, location, location. Property values are not a result of racism, or bias they are a result of the location of the property and the surrounding sales that support what properties in that location are selling for.

    No matter where a property is located one can find a direct correlation between property values and the demographic data as reported by the census bureau which in no way depicts race as a factor and even though race make-up is reported if you remove this from any demographic report what you are left with is objective facts such as household income and employment. In other words, households with certain income thresholds cannot afford a home from a different location where prices are higher demanding that there is sufficient income to afford the property.

    As far as differing property values by two different appraisers go as stated in the one video this most likely is not a problem related to bias but a problem related to experience and competency as even though qualifications for licensure and certification are the same this does not in any way make two appraisers equal peers and therefore an inexperienced appraiser who was incorrectly mentored will produce a substantially different report than one who is competent, experienced in their market.

    The unreported most prevalent problem in the appraisal industry is the Federal National Mortgage Association’s use of Collateral Underwriter which unintentionally creates redlining as it selects sales at the census block group and census block levels which is extremely narrowly focused; furthermore, Fannie Mae suggests that appraisers also select sales by this procedure. If you notice I use the word sales not comparables as only licensed and certified appraisers can select a comparable, not Fannie Mae, Freddie Mac, or any other entity in the primary or secondary market that is unlicensed.

    A considerable number of appraisers out there appraise under duress of going out of business from being placed on Fannie Mae’s AQM List as a direct cause from Fannie Mae’s Collateral Underwriter programming of selecting sales based on census blocks and census block groups; therefore, appraisers are also selecting sales not comparables to align with Fannie Mae’s CU so they don’t have to waste significant amounts of time explaining why they did not use those sales generated by CU, or worse which is after so many instances of not utilizing sales Fannie Mae’s CU thinks is best is an appraiser receiving a letter from Fannie Mae stating you may be placed on their 100% review list because you selected what you felt were the best comparables and disregarded CU selected sales that were not comparable in the appraiser’s opinion, and as a result, if placed on the AQM list an appraiser will ultimately go out of business overnight.

    This problem of so-called appraisal bias has only been making water cooler talk for about as long now as Fannie Mae’s collateral underwriter has been fully implemented into the market, is this a coincidence, I think not.

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