How professionals are managing the biggest obstacles to the home valuation process.
From allegations of appraiser bias in the home valuation process to new controversial methods of conducting an appraisal, the profession is under intensifying scrutiny—and a new National Association of REALTORS® survey offers insights into these challenges.
Many appraisers express dissatisfaction with the impact industry regulations and appraisal management companies are having on their business, saying these issues are delaying their work, according to NAR’s 2022 Appraisal Survey. Appraisers also are facing more lawsuits claiming racial bias in undervalued homes, which adds to their stress on the job. “We currently have big targets on our backs,” writes one survey respondent who is an appraiser. “We are being called racists left and right in an attempt to destroy the appraiser.”
The survey of more than 600 appraisers and 2,500 residential real estate pros was conducted in May.
Only 3% of real estate professionals report witnessing or experiencing discrimination in the appraisal process, the NAR survey shows. However, 16% say they believe such discrimination exists. A property owner’s race or color is the most likely catalyst for appraisal bias, survey respondents say. “An appraiser valued a home at one-third less than the actual value after meeting the homeowners,” one respondent writes.
Appraisers also say they’re feeling the pressure from recent lawsuits, with one respondent commenting: “We are the most policed player in the mortgage transaction, and no one could get away with long-term discrimination without being discovered and terminated from the profession. The comparables do not lie. We are reporters of the market statistics—nothing more.”
Top Appraisal Challenges
Accusations of appraisal bias are not the biggest issue appraisers are reporting, even though it has become a larger issue in the public eye. The number one concern for appraisers, the survey shows, is appraisal management companies that are disrupting the industry. AMCs work with lenders and appraisers to order, track and deliver appraisal reports. Survey respondents complain that AMCs can delay appraisals for days or even weeks as lenders shop for appraisers with the lowest fees or quickest turnaround times.
Appraisers also report the following challenges facing the profession.
The majority of appraisals continue to be conducted in person, but desktop and drive-by appraisals—which don’t require an appraiser to enter the home—are becoming more frequent options, the survey shows. Yet, 63% of appraisers surveyed admit they are “very uncomfortable” with desktop appraisals and many other alternative valuation methods that are completed remotely.
National Association of REALTORS®
Reprinted with permission
