The Appraisal Blog

Over the past several weeks I've discussed specific examples of bias in the appraisal industry.  The default opinion of the main stream media, activists, and now the general public, is that anytime a homeowner feels their house has been undervalued, it is due to racial bias.  There can be no other explanation.

As an appraiser this doesn't feel right to me.  The appraiser isn't the be all end all in the process.  There are guidelines we follow, there is typically a review by the AMC, and then another by underwriting.  And sometimes the market value isn't cut and dry.  Not all properties are equal, not all adjustments are obvious.  The appraisal is, after all an opinion.

Edward Pinion and Tobias Peter have analyzed some of the data and are offering alternative explanations to the ubiquitous narrative that all "low" appraisals are due to racial bias.  These include: misplace focus on purchase transactions, differences in buyer characteristics, the presence of seller concessions, the severity of the under valuations, and even the notion that under-valuation may actually benefit homebuyers.

Please read and let me know what you think.



https://www.aei.org/research-products/report/exploring-alternative-explanations-for-appraisal-under-valuation/