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El_Grande_Bonero t1_jbpgef2 wrote

Reply to comment by [deleted] in Black couple settles lawsuit claiming their home appraisal was lowballed due to bias by eastbayted

I have worked in real estate for nearly a decade and have been involved in over 1000 transactions and I never seen an appraiser lowball a property by 25%. I had one deal where the appraiser was about 10% low. But appraisers don’t work for the bank and have no say in how much money is loaned.

The appraiser here did not follow accepted best practices and while we are not privy to the specifics it seems with the settlement that there must have been some evidence that it was based on race.

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Meldreth t1_jbpi09l wrote

Same time in real estate, but I have seen homes 40, 50, 70k less than sales price. Normally this comes from the agent doing a terrible job on comps to list it. The inflated market where people were buying homes over sales price for the past two years didn't help either.

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El_Grande_Bonero t1_jbpiw3b wrote

> 40, 50, 70k less than sales price

And what was the sales price of those homes? You said you had seen appraisers value homes at 66% of market which would imply the sales prices for these homes are between $120,00 and $210,000. The raw number isn’t the issue it is appeasing at a staggering 33% below market that is the issue. Even over the last two years I can understand a 10% delta given how fast things have moved but not 33%. Especially when that single low appraisal is bookended by much higher ones.

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Meldreth t1_jbpjg9q wrote

Ranged, but generally 200-400k. Percentage wise it was significant. This week I had one come back 30k less, but that was on a 615k sales price.

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El_Grande_Bonero t1_jbpkhep wrote

I have to be honest that seems remarkable. I work in a relatively hot market and say 20-30% appreciation in some areas and even then didn’t see appraisals that far off. You must have some uniquely bad appraisers in your area. But it doesn’t change the fact that this appraiser failed to use standard practices and I would bet that in the discovery phase the plaintiffs found evidence that this was not a one time occurrence.

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[deleted] t1_jbpjqcy wrote

[deleted]

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El_Grande_Bonero t1_jbplvoh wrote

I’m confused why that would matter?

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[deleted] t1_jbppelo wrote

[deleted]

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El_Grande_Bonero t1_jbq0k3s wrote

Haha ok bud. Just to be clear I said almost a decade. And you are free to doubt but I have run teams that sell over 200 homes a year and have not seen a huge number of appraisals come up that short. One of my best friends is a lender and another close friend owns an AMC. I’ve also been through multiple refinances. And am currently developing an automated appraisal system using machine learning and AI. Explain to me which standard appraisal practices change based on the type of transaction? I’m not doubting that there are bad appraisers, there certainly are, but I’m doubting that it is a common occurrence. It is especially rare to see appraisals lowballed by 33%. I have been involved in transactions where the appraisal came in 10% below what I felt was market rate and that was outrageous 33% is insane.

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