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The appraisal industry has been under scrutiny lately, with low valuations in predominantly minority neighborhoods that have led to accusations of bias. Your clients may have noticed the headlines, and they might have concerns about their chances of getting a fair appraisal.
The Federal Housing Financing Authority recently analyzed millions of cases, uncovering potential race-related bias in thousands of appraisals. President Joe Biden formed the Property Appraisal and Valuation Equity task force to develop recommendations to eliminate racial and ethnic bias in the appraisal process. The task force has released an action plan, which real estate professionals can use as a guide to help ensure their clients obtain an impartial and objective appraisal, Charlie Lee, senior counsel and director of legal affairs at the National Association of REALTORS®, says in NAR’s latest Window to the Law video.
Agents can be advisers to their clients when they’re selecting a lender. Remind your clients to ask lenders about their protocols around fair housing and implicit bias training as well as their criteria for selecting appraisers. You also can provide appraisers with relevant, objective data about your listing and comparable home sales. Remember, it’s OK for you to talk to appraisers and answer questions they may have about the home.
If your client feels the appraisal was unfair or completed inaccurately, he or she can request an appraisal review or even a second appraisal, Lee says. They also can file a complaint with numerous agencies, such as the Appraisal Complaint National Hotline, U.S. Department of Housing and Urban Development, Consumer Financial Protection Bureau or local housing and civil rights authorities.
Real estate pros should be aware of how they can help their clients in case bias is ever suspected in an appraisal. After all, “REALTORS® are committed to upholding fair housing laws in all real estate activities, including appraisals,” Lee says.