Unmasking Home Appraisal Bias: How to Spot Discrimination

As a homeowner, it's crucial to be aware of potential biases in the appraisal process that could lead to undervaluation of your property. Racial discrimination is a persistent issue in the real estate industry, and home appraisals are no exception. To help you identify if you're experiencing discrimination, we've compiled a list of indicators and steps you can take to address any disparities you may encounter.

Disparity in Appraisal Values

One of the most telling signs of appraisal bias is a significant difference between the appraisal value of your home and similar homes in your neighborhood or the initial appraisal value. For instance, in the case of Paul and Tenisha Austin, their home was initially appraised at $995,000, but after they "whitewashed" the house, the appraisal value increased to $1,482,500, a difference of $487,500 (Source: San Francisco Chronicle, December 2021).



Neighborhood Description

Appraisers may use derogatory or discriminatory language in their reports when describing the neighborhood. This can indicate bias. For example, the Federal Housing Finance Agency (FHFA) found thousands of potential bias cases related to neighborhood descriptions written by appraisers, where they referenced the neighborhood's racial makeup or the percentage of the local population who were immigrants (Source: FHFA report, December 2021).

Appraiser's Background

Researching the appraiser's background and experience can help you determine if they have a history of bias or discrimination. While this may not be a definitive indicator, it can raise red flags.

Appraisal Process

Observing the appraiser's behavior during the appraisal process can also reveal potential biases. If the appraiser seems to be ignoring or devaluing certain features of the home that are typically valued, it may indicate bias. For example, in the case of Dr. Nathan Connolly and Shani Mott, their home was appraised at $472,000, but after they removed family photos and had a white male colleague pose as the homeowner, the appraisal value increased to $772,000, a difference of nearly $300,000 (Source: Freddie Mac report, September 2021).

Appraisal Standards

Comparing the appraisal standards used by the appraiser with the standards set by professional organizations, such as the Appraisal Institute or the Appraisal Foundation, can help you identify any deviations that may indicate bias.

If you suspect that you're experiencing discrimination in the home appraisal process, don't hesitate to take action. You can request a second appraisal, file a complaint with the appropriate authorities, or seek legal advice. By being vigilant and informed, you can help ensure that your home is appraised fairly and accurately, regardless of your race or ethnicity.

Word count: 598