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If you see 3rd party race demographics in a narrative appraisal report?

Joyce Potts

Elite Member
Supporting Member
Joined
Feb 6, 2005
Professional Status
Certified Residential Appraiser
State
Florida
I wouldn't even be using demographic data based on race for an affordable housing / down payment assistance residential report.
 

sputnam

Senior Member
Joined
Apr 24, 2012
Professional Status
Certified General Appraiser
State
North Carolina
As far as I know... and as yet, there is no regulatory prohibition against including demographic data that includes information about the racial make up of the area. If it is in a report I'm reviewing, I ignore it unless my Client has specifically instructed me to consider and comment on it.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
Never have I ever.
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
I don't use the Census Tract Info for several reasons.
1. It has the racial composition of the Tract(this is a trap for appraisers)
2. The Tract Boundaries make no sense.
3. very little of the information has anything to with our work. The most you would get out of that is the mix of Property types.
4. Census is done every 10 years. So it becomes dated almost immediately. (although I think the IRS updates the Income portions) I can not confirm that.

I said this before I will say it again. WE SHOULD NOT BE REQUIRED TO PROVIDE THAT TRACK # If it is important to the Subject Identity for appraisal purposes then ALL COMPARABLE would need the same Census Tract #

That Tract #'s only purpose is to possibly Identify Red Lining by Lenders and to Identify areas for Government Actions(of any type)
 

Russ Kitzberger

Member
Gold Supporting Member
Joined
Jul 3, 2007
Professional Status
Certified General Appraiser
State
Ohio
It depends on what the narrative report's subject is. If it is a leased fee interest in a particular special use property, and the special user lessee lease terms are over market fair rents, and the user/lessee is in a business who's target market includes a specific racial demographic, then it would be misleading not to analyze the demand side of the business and include that in your capitalization of tenant default risk. Particularly if it is a speculative investment or build to suit with high Tenant Improvement Allowances.

Narrative reporting is different than residential appraisals covered under fair credit regulations.

Try determining the leased fee interest in a property that is leased on a 10 year term to a community action group without analyzing the tenant's target market in your credit risk analysis in your DCF.
 
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