gregb
Elite Member
- Joined
- Sep 3, 2011
- Professional Status
- Certified General Appraiser
- State
- California
Please define "high" and then "low" while you are at it.If i say that the subject is located in a high crime area, and it actually is located in a high crime area. It is complete and utter nonsense to tell me that I can't say that. Of course, I will need to be able to define the parameters for 'high crime' and I will need to have objective data in my work file and I should be able to demostrate how it is relevant to the valuation.
Appraisers are professionals who provide an opinion of value for real estate transactions. When appraisers evaluate a property, they must adhere to a set of ethical standards and guidelines that are designed to ensure their appraisals are objective, unbiased, and based on factual and relevant information. Here are several reasons why an appraiser should not state that a neighborhood is a "high crime area" in their description:
- Subjectivity and Bias: The term "high crime area" is subjective and may reflect personal bias. What one person may consider a high crime area, another may not. Appraisers are required to provide an objective analysis based on verifiable data.
- Professional Standards: Appraisers must comply with the Uniform Standards of Professional Appraisal Practice (USPAP) which mandates that appraisal analysis must be data-driven. Descriptive terms like "high crime" are not quantifiable or specific and do not typically have a place in the appraisal report unless they can be supported with data.
- Fair Housing Laws: Mentioning crime rates could potentially violate Fair Housing Laws. These laws prohibit discrimination based on race, color, national origin, religion, sex, familial status, or disability. Associating a neighborhood with high crime may indirectly target or stigmatize a group protected under these laws.
- Relevance to Property Value: While crime rates can affect property values, it is the appraiser's role to report on how these rates affect property values rather than making generalized statements. The focus should be on the impact, if any, that verifiable crime statistics have on market value and not on labeling a neighborhood.
- Potential for Stigmatization: Labeling an area as a high crime neighborhood can stigmatize the area and contribute to a negative perception that may not be current or accurate. This can unfairly impact property values and the community’s reputation.
- Dynamic Nature of Crime Statistics: Crime rates in a neighborhood can change over time, so even if current statistics indicate higher crime rates, this may not be a permanent characteristic of the area.
- Market Perception: Appraisers must consider market perception, but they should do so based on factual, current, and relevant data. Subjective statements about crime can misrepresent the market's actual perception.