A Black couple ‘erased themselves’ from their home to see if the appraised value would go up. It did - by nearly $500,000

[The Bob]

The irony is, assuming the lower appraisal is correct since it used the most proximate comps, is that these folks will be seriously upside down with the higher appraisal.

 

[George Hatch]

Nobody can know how these appraisals turned out this way, but it doesn't take much imagination to envision one of the possible scenarios: Borrower and loan originator thinks they're getting shafted, enough to go to extremes with staging the property (as if appraisers even notice the decor), and then apply for a new loan. You just know they're going to let it drop that they think the prior appraisal was racially biased. And one way or another that info gets transmitted to the new appraiser who then proceeds to make SURE they hit the desired outcome lest they get dragged into a civil rights lawsuit.

Meanwhile, if you were to appraise this property today you'd have to at least notice these (2) 2021 sales of similar design in that neighborhood.

 

[Deleted member 122624]

Here is the full Lawsuit from the courts.

 

[George Hatch]

I don't see any allegations of an error in fact in the low appraisal. They got an outcome they don't like and they're going straight to racism based solely on the outcome of the appraisal they liked.

What those outside comparables are like and what the sales history is of the different neighborhoods is going to make a difference.

 

[George Hatch]

 

[J Grant]

I always believe a market value opinion regardless of whop orders, it including a lender client or private client. But not every appraiser agrees - we've seen posts saying things like when it is a private client we can "think outside the box"

Well, no,- because an appraisal IS a box - a box of an accepted model of standards and SOW to get a credible result. .Sure, we can do whatever we want, such as go against what actual buyers behavior and use all cherry picked, less similar comps to get a desired $ result - but it will not be a credible appraisal.

Which goes back to clients - if the first appraisal was ordered by the lender, that was a not biased opinion (I use bias not racially, but the way non biased appears in the certs and standards, not the appraiser is not biased toward a value $ amount or direction or party or subsequent event ) The second appraisal, if it was ordered by the owner or attorney , (imo ) influence to achieve a result, which likely makes the appraisal not credible.

 

[J Grant]

cert 7. I selected and used comparable sales that are locationally, physically, and functionally the most similar to the subject property.

Above 7 is from the certs page of the URAR, it will be pretty easy to get this suit dismissed in court ( unless the judge is an idiot )

Hey Judge, the cert page does not say this:
I selected and used comparable sales that are locationally, physically, and functionally not the most similar to the subject property .

 

[J Grant]

Here's the money quote...

By focusing the first appraisal only on the small number of homes sold in the immediate Marin City area, Howard-Gibbon said the appraiser “built an invisible barrier” around the home by comparing it only to other sale prices in a long-marginalized area — a result she called “recycled discrimination.”

This actually goes to my unpopular thread about fact prices and value opinions -
Prices are facts and appraisers can not control prices in an area. We do not give opinions of what the most probable price should be in the actual market, so we are not responsible for what happens out in the actual market.

Appraisers give value opinions, and the value opinion follows a set of SOW that can be measured as credible. The "invisible barrier " is indeed a thing, identifying where the typically motivated buyer would find the most similar properties. But an "invisible barrier " is done in all appraisals,, ,not for a discrimination purpose, but because ( see cert 7 ) the standard of an appraisal model is to use the most locationally and physically similar comps to the subject property.

 

[J Grant]

The subject looks like from photos a C 4 build quality. Were the comps similar quality or C 3 Idk,

However, one test of nonsense is ask the owner to put their house on the market and see what offers come in ( assuming open market and not a pre arranged straw buyer ). If an owner really thought they could sell their house for 1.5 million, and be able to buy a similar house within a few streets in the 900k range, why wouldn't they do that ? I would.

If they put their house up for sale and get offers in the 1.5 million range the second appraisal is more credible. If the offers come in at the 900k- million range, first appraisal more credible. And if offers come in at the 800k range, maybe the first appraisal was a pushed value.

 

[glenn walker]

The house is a POS and lawsuit is juts a good old fashioned shakedown and we are going to see mpre and more of these types of set ups in the future.