Black couple 'erased themselves' from their home to see if the appraised value would go up. It did..

[Nevilledog]

Link to tweet

https://www.sfchronicle.com/bayarea/article/Black-Marin-City-couple-sues-appraiser-for-16672840.php

No paywall
https://archive.ph/BlZs2

Paul Austin thought things were going well when the appraiser came to his Marin City home last January.

The appraiser complimented the views of the San Francisco Bay, and he was sure to point out all the improvements, Austin recalled at an Oct. 13 meeting of a state reparations task force. So he and his wife Tenisha Tate-Austin were shocked when the appraisal valued their home at $995,000 — nearly half-a-million dollars less than another appraisal 10 months earlier.

The couple, who is Black, got a second opinion last February. This time, they asked a white friend named Jan to sit at the kitchen island and pretend to be the homeowner. They also “white-washed” their home by hiding art and family photos. That appraiser said their house was worth $1,482,500.

The $487,500 discrepancy between the two 2020 appraisals pushed the couple to filed a fair housing lawsuit in federal district court this week against appraiser Janette Miller, her appraisal firm Miller and Perotti Real Estate Appraisers, Inc. and national appraisal company AMC Links, LLC. It’s the latest escalation in a series of similar cases of alleged racial bias in the home appraisal process as California property owners move to reap financial gains from record home prices.

“We did our homework,” Austin told the Reparations Task Force in a panel on the racial wealth gap in October. “We believe the white lady wanted to devalue our property because we are in a Black neighborhood, and the home belonged to a Black family.”

*snip*

[iemanja]

1. I wish I could say I am surprised.

[Hortensis]

28. :) You really should be. This nasty appraiser hung his own ass

out to dry every bit as stupidly as the Crumbley parents. I used to be an appraiser.

Appraisals are verifiable fact/market-based as much as possible, and that various people involved would question a valuation in the neighborhood of HALF A MILLION DOLLARS BELOW EXPECTATIONS is virtually guaranteed.



Not just the property owners. The lenders and realtors involved also have both professional and personal monetary interests in good valuations. That's the reason by far most dishonest appraisals overvalue properties. They've all already done their own estimates based on available market data before assigning it to an appraiser. That appraiser would have had to "excuse" the objective differences away by lying about things like condition, "appeal," etc.

Of course, no one's surprised that malicious racists work in every field, including financial. But that's a different thing to not be surprised at.

Btw, WAS this low valuation race-based? Possibly -- had to be something really stupid to trigger it. But since the first valuation was not supported by market data, it's virtually certain that a second appraisal would have exposed the malfeasance, even if the owners multiplied the racial clues instead of erasing them.

[yardwork]

7. Two appraisals in the exact same neighborhood, same house, $500,000 difference.

Read the article again.

[left-of-center2012]

8. I don't need to read it again

Have a nice day

[yardwork]

11. Of course you don't.

[JI7]

9. People were willing to pay more if they thought it was owned by a white person

[mopinko]

10. it's nowhere near as scientific as they like to claim.

tons of grey area that could easily add up.

[yardwork]

12. Like what?

Two appraisals, one month apart, exact same house and neighborhood. The only difference was a white woman sat at the table and all family photos were removed during one of the appraisals.

[mopinko]

15. couple things- condition and style.

i think condition is likely where the big diff is. on a home like that, if the appraiser finds minute things, one might mark that down, and another might not notice.
but the appraiser might, say, not like modern architecture, so not value it. or not like a fancy victorian because of the maintenance costs.

and they can pick and choose their comps. that's always so dicey anyway.

and dont think appraisers dont know what the owner/bank is looking for. if this lady is a bigot, she could have low balled for the hell of it.

[yardwork]

17. The exact same house, appraisals one month apart.

What changed in the "condition and style" enough to make a $500,000 difference?

[mopinko]

18. nothing in the house changed, the appraiser did.

which is why the outrage. clearly there was a bias at work here.
ppl like to think that numbers can be trusted, but clearly, in the hands of bigots, numbers lie.

[Hugin]

21. My question is whether it was the exact same person doing the appraisal.

I guess it couldn't have been.

If it were, they would know they had appraised the home earlier.

In my experience, an appraisal can differ wildly from one appraiser to another. Also, depending on the purpose of the appraisal taxes, loans, pending purchase, or market research.

[mopinko]

22. no. it wasnt.

[Hugin]

23. Thanks for answering my question.

One data point is a little murky on a claim of systemic bias. Which, I do believe exists.

I've read similar experiments where it has held true.

[mopinko]

24. i think it happened when i bought my house.

very diverse hood. previous owners were mexicano. the appraisal came up short, and we had to dig up some extra money.
the hood, as a whole, has very low values compared to nearby hoods. i have no doubt that the diversity of the population is related to that.

i own a lovely single fam rental. it's worth about $600k right now. but even if you could find a place comparable a zipcode either way, and it's worth $1m. IF you can find it, the standard lot around here is 1 1/2 a city lot. very rare.
needless to say- nearby hoods are mostly white.

[Hugin]

25. I can see where that is evidence of systemic bias.

I'm fortunate in that the neighborhood where I bought my house was extremely homogeneous right down to the ages of the owners. As they've all suddenly sold and moved off to greener pastures. It has experienced not only a renaissance of diversity, but, as the owners have fixed up their new digs to their tastes. The property values have gone up dramatically. Carrying me and my shack along for the ride. To the point I'm feeling a little guilty and need to do some improvements. When I start applying for some moneys to do it, we'll see if there's any bias applied.

[mopinko]

27. when i 1st moved to the city, it was to a hood that was just flipping.

it was ugly. one reason i landed where i did was because i thought the diversity = stability.
and it has slowly climbed. '08 hit hard, and we are just now getting back to values of those days.

pretty much every building on my block has had some work done since i have been here. lots of big rehabs.

[Sympthsical]

16. Black neighborhood is overstating a bit

This is a small, racially diverse unincorporated area right next to Sausalito (white, affluent).

But this seems a very clear case of targeted racial discrimination, as the price changed with the different owners.

It's a problem, especially in the Bay Area with home prices being goofy. We just had a refinance done, because our house gained nearly 30% in value in two years, and we were able to get a lower rate while knocking three years off our 15 year.

But what you get quoted can and does depend on who you are and the perception of where you live. West Oakland, for example, is in the early years of gentrification, and there is all kinds of chicanery surrounding how they value everything there.

Plus this happened in Marin County. I absolutely believe it. It's like the Bay Area's NIMBY headquarters.

[mopinko]

19. yeah, a mixed hood, and you can see someone wanting to keep another black family out.

and if the market is wonky, there's plenty of room for shenanigans.

[erpowers]

3. No Racism

Yet, many people claim there is no racism in America. This is another example of the racism that still lingers in America.

[yardwork]

13. There are at least two posters in this very thread who can't seem to see this.

[Hekate]

4. That is absolutely gross. And (white) people think red-lining doesn't exist any more.

[LiberatedUSA]

5. This is where the disconnect happens.

Thinking “if I don’t say this or that and don’t believe my skin is better than other skin colors, racism is solved or I am not a part of it.”

This is a shining example of racism at its most insidious and built into the system.

[ck4829]

6. K&R

[WhiskeyGrinder]

14. This happens A LOT. K&R.

[MineralMan]

20. Not surprising, actually. Real estate appraisals are, but should not be,

affected by the personal opinions of the appraiser. Normally, they don't vary that much, but they do vary from appraiser to appraiser. Clearly, though, in this case the appraiser's racial bias is quite apparent.

Such a thing should never happen. Such things happen, though, all too often.

[Hassin Bin Sober]

26. For those wondering how a black owner can make a white neighborhood a black neighborhood.

A black person sitting in the kitchen makes it a “black neighborhood.” At least according to that appraiser. Apparently.

Appraisers are supposed to be really careful about who they photograph while making the report. Iirc, they are supposed to be really careful about trying to NOT include people in their appraisal photos (I remember seeing notes in reports if this was unavoidable - on a busy street for example). This rule is there to avoid bias in the person reading the report. But it’s harder to avoid bias in this case when the person MAKING the report has a bias.

This appraiser may have thought, consciously or unconsciously, she was doing the lender “a favor” by “protecting” the bank.

Worse yet, the appraiser may have been under orders to look out for “the black” neighborhoods.

I’ve been in the consumer lending business my whole career. An old-timer auto lending guy told me they used to place a discrete “X” on the top of a black person’s credit application when they would send the application to the bank. Which didn’t make sense because the car dealer would be cutting their own throat by lessening the chance of obtaining a loan for their sale. But it happened anyway.

Even reading the story in the OP my pasty white ass is thinking this couldn’t happen. Then I talk through what little I know about the history of lending in this country and it’s TOTALLY plausible.

[dsc]

29. It seems it has to be more specific to owner than to neighborhood

since the neighborhood didn't change between the appraisals. But the appraisal industry clearly needs some civil rights enforcement directed at them. Fine one of them to oblivion and maybe that will help.