An Appraiser's View

NAR Comments on FHFA's Planned Expansion of Appraisal Waiver Programs

The National Association of Realtors recently weighed in on the expansion of appraisal waivers and why they are against it. Kudo's to them for thinking this through. 
Here is the link to the story and a link to the actual comments. 
https://www.nar.realtor/washington-report/nar-comments-on-fhfas-planned-expansion-of-appraisal-waiver-programs

https://narfocus.com/file/7463.pdf

As a long time die hard 49er fan I have spent a lot of time watching games both in person and at home. I also enjoy preparing to watch games as if I am the coach, breaking down the opposing teams strengths and weaknesses, how they match up with my team, how my team should adjust, and how their team may adjust. The last two years I have added in how the assigned refs will influence the way the game is played. As an expert in both fields, my honest assessment is NFL officials are nowhere near the standard of excellence required of real estate appraisers. 
For instance.
A real estate appraiser provides an unbiased opinion whereas NFL refs are influenced by the home crowd.
A real estate appraiser does their due diligence on each aspect of the appraisal. NFL officials make the customer (the coach) request someone else look at it in order to ensure it was correct. And they limit them to requesting accuracy twice a game. 
A real estate appraiser reports everything they see. An NFL ref "let's them play" which alters the result. and  
A real estate appraiser can take as much time as needed to be accurate, whereas an NFL official has to keep the pace of the game. 

Wow, in looking over the list, it appears NFL officiating is similar to an online valuation of your home, quick, but not very accurate.
 
To be fair, it's the speed at which the decision is required that affects the accuracy, not the integrity of the appraiser or ref. So the next time you get impatient with how long an accurate, unbiased appraisal takes remember, the alternative is a poorly called game that has a 50% chance of altering the result against you. 

It's been one heck of a season, 
FAITHFUL THEN, FAITHFUL NOW. GO NINERS!! 

It's been documented that a business that puts forth an opinion on a political hot topic is committing suicide. I believe that CAN be the case, but I also believe being silent on an important issue that is within your area of expertise can also be detrimental to that business. For me, racial bias in appraising falls in the latter category. So lets dive in. 
First of all, let me be transparent. I have not yet taken the course on racial bias that I will need to take before I can renew my license. I am purposely venturing an opinion prior to taking the course, because I am curious if my opinion and approach will differ once I have the required education? I am open minded but as of now cannot see how it could change. Here's why. 
Appraised values have been required by federal law to be unbiased since 1983.  Additionally appraisers are required to use the most relevant comparable sales or they are also in violation of both appraiser bylaws and federal law. The State of California also has laws against appraiser bias. Yes, I realize that just because there is a law doesn't mean everyone abides by it and that bias doesn't exist. It just means that a biased appraiser would need to be diligent in preparing a biased appraisal that would not raise red flags so as not to get caught. I'm sure bias happens, but not in my reports. I always report my opinion of MARKET VALUE which ensures I do not have bias or prejudice. What do I mean by "Market Value" and how does that keep me from being biased? 
Market value, as defined for federally related transactions, is what a TYPICAL buyer would pay for a home. The determination of a typical buyer includes location, size of home, size of site, age and condition of home, quality of home, etc.. Market value does not include a neighborhoods make up of race, religion, sexual orientation, etc. . Think "If I found a house I wanted to buy, who else would be looking to buy that home?" Those are the typical buyers for that house. Using comparable sales from outside the defined "typical buyer" market throws up a red flag that the appraisal needs to be reviewed which cause the appraiser more work. I think it's important to also understand what exactly is a comparable sales. 
A comparable sale is just what it sounds like. It is a sale of a home that you and other typical buyers would considered similar to the home you are wanting to refinance or buy. It is rarely an exact match, but should be similar in some of the following. Location (think things like School district, near freeway, rural area, etc), living area, bedroom count, bath count, stories, amenities, and site size. ie; If you are buying a 2500 square foot, 5 bedroom, 3 bath home, would you pay the same price as you would for a 1500 square foot 3 bedroom 2 bath home on a similar sized lot in the same neighborhood? Of course not. Similarly, you probably would not pay the same price for a home that is located in an neighborhood that has industrial and commercial uses as you would for one that is in a quieter neighborhood. Basically, comparable sales are sales that have the features most similar to the the home you are wanting to buy or refinance. A neighborhoods racial or religious profile should have no influence on which comparable sales an appraiser uses. In fact, I believe it has no place in any industry.  
I am not racist or prejudice. I have seen it and it's both disgusting and confusing. I like talking to people, especially those who have culture. How can someone judge a person without getting to know them? Do they not realize what they are missing out on? I have been invited to many family Bbq's of people I have just met and the celebration itself is the only reason I remember what race or religion they were. 
Anyway, I digress from the point of the post. (Climbs down off soap box) The point is, I understand racial bias exists in appraising, it just doesn't exist in mine. 
 
Have a great day everyone, talk to people you don't know, and enjoy life!