Appraisal Bias

[KONA]

Range of value needs to be incorporated instead of a point value. May help avoid bias.

 

[djd09]

Range of value needs to be incorporated instead of a point value. May help avoid bias.

your porridge is too hot and theirs is too cold

 

[RCA]

As today, that is up to the software provider.

While it there is new flexibility in adding additional feature fields to the sales grid, apparently without constraint, is there any new flexibility in entering additional columns to the sales grid? I doubt that. So, in fact, I will still need the ability to add additional pages to the grid - in Legal Format, rotated 90 degrees. I can do that now. Will I be able to do that with the new format?

 

[DWiley]

While it there is new flexibility in adding additional feature fields to the sales grid, apparently without constraint, is there any new flexibility in entering additional columns to the sales grid? I doubt that. So, in fact, I will still need the ability to add additional pages to the grid - in Legal Format, rotated 90 degrees. I can do that now. Will I be able to do that with the new format?

That is also a question for your software provider.

 

[RCA]

That is also a question for your software provider.

Or I suppose pay $550 to get access to the MISMO 2.4.0 standard.

 

[J Grant]

Range of value needs to be incorporated instead of a point value. May help avoid bias.

Avoid bias?A range of value puts appraisers out of work.

I cautioned for years to those saying this - well the stakeholders heard you and use the AVM for a range and replaced us with WAIVERS.

A lender client needs a point value and if the appraiser does not provide it, they will use somebody else or some other system to get it. With a waiver, the lender is happy to provide their own value estimate. So you don't have to sweat it anymore.

 

[shrubberyvaluation]

Avoid bias?A range of value puts appraisers out of work.

I cautioned for years to those saying this - well the stakeholders heard you and use the AVM for a range and replaced us with WAIVERS.

A lender client needs a point value and if the appraiser does not provide it, they will use somebody else or some other system to get it. With a waiver, the lender is happy to provide their own value estimate. So you don't have to sweat it anymore.

Just did one where Zestimate is $1,700,000. My opinion of value $3,500,000. Oh and zillow claims a $500,000 home is comparable. I mean I guess if we give a range of $1,000,000 to $5,000,000 and thats sufficient we would be out of business.

 

[Mejappz]

It takes a minimum of two years to become a residential certified appraiser. The Appraisal Foundation (aka TAF) maintains minimum standards for the industry and has long required a two-year mentoring system where appraiser trainees need to find someone in the profession to take them under their wing – a mentor – and support them for two years because trainees add little value to the mentor if banks don’t accept their work. This is a key reason why the appraisal industry is devoid of diversity. This is also why the industry has been aging out for years, unable to bring in new appraisers in significant numbers. After the 2009 Home Valuation Code Of Conduct became embedded into housing policy to stem the influence of mortgage brokers over appraisers, appraisal management companies (aka AMCs) came to dominate the administration of the residential appraisal business as banks were looking to shed costs in the aftermath of the housing bubble and outsource their former in-house appraisal departments.

Since the financial crisis, most banks have required appraisers to be certified and rarely accept work by appraiser trainees. AMCs account for about 80% of residential appraisal orders from banks nationwide and often keep at least half of the appraisal fee the consumer pays at the time of the mortgage application. The consumer is generally unaware that the appraiser gets a limited portion of the appraisal fee. As a result, the financial condition of appraisal firms has deteriorated significantly since the GFC. Why does this matter? Because the two-year mentoring requirement became even more problematic after the GFC as appraisers were less able to carry an appraiser trainee for two years to get their certification. TAF has been unable to pivot as the world has changed.
The TAF mentoring system has perpetuated low diversity within the appraisal industry. In 2021 our industry was 98% white, dead last in the 400 occupations ranked by the Bureau of Labor Statistics. TAF has had only one person of color on its technical boards in over three decades.
More here.

And Why Is the Second Appraisal Always the “Correct Value?”

Why is the second appraisal always the correct value? Appraisers are accused of bias for low values & if borrower defaults they're accused of overvaluing.

appraisersblogs.com

 

[Fernando]

It takes a minimum of two years to become a residential certified appraiser. The Appraisal Foundation (aka TAF) maintains minimum standards for the industry and has long required a two-year mentoring system where appraiser trainees need to find someone in the profession to take them under their wing – a mentor – and support them for two years because trainees add little value to the mentor if banks don’t accept their work. This is a key reason why the appraisal industry is devoid of diversity. This is also why the industry has been aging out for years, unable to bring in new appraisers in significant numbers. After the 2009 Home Valuation Code Of Conduct became embedded into housing policy to stem the influence of mortgage brokers over appraisers, appraisal management companies (aka AMCs) came to dominate the administration of the residential appraisal business as banks were looking to shed costs in the aftermath of the housing bubble and outsource their former in-house appraisal departments.

Since the financial crisis, most banks have required appraisers to be certified and rarely accept work by appraiser trainees. AMCs account for about 80% of residential appraisal orders from banks nationwide and often keep at least half of the appraisal fee the consumer pays at the time of the mortgage application. The consumer is generally unaware that the appraiser gets a limited portion of the appraisal fee. As a result, the financial condition of appraisal firms has deteriorated significantly since the GFC. Why does this matter? Because the two-year mentoring requirement became even more problematic after the GFC as appraisers were less able to carry an appraiser trainee for two years to get their certification. TAF has been unable to pivot as the world has changed.
The TAF mentoring system has perpetuated low diversity within the appraisal industry. In 2021 our industry was 98% white, dead last in the 400 occupations ranked by the Bureau of Labor Statistics. TAF has had only one person of color on its technical boards in over three decades.
More here.

And Why Is the Second Appraisal Always the “Correct Value?”

Why is the second appraisal always the correct value? Appraisers are accused of bias for low values & if borrower defaults they're accused of overvaluing.

appraisersblogs.com

You're right. I didn't think about the Mentor system working unfavorably toward minorities since few minority appraisers. The system has failed and I have awoken.

 

[glenn walker]

Waivers are Unbiased so use them and be done