From "A Black couple says an appraiser lowballed them. So, they ‘whitewashed’ their home and say the value shot up" (WaPo).
The main couple discussed in the story had put $400,000 into improving a northern California house that they bought in 2016 for $550,000 and say they were shocked when it was appraised at $995,000. So they "whitewashed" their house by taking down their family photos and their "African-themed" artwork. They got a white friend to put up photos of her family — who I presume were all white people (WaPo fails to say!). When the house was appraised at $1.48 million, by a different appraiser, they sued the first appraiser.
I had my home appraised (2018) and, in addition to he countless pictures, the appraisal form specifically lists 3 comparable homes within walking distance and then adds or deducts from those sale prices because of differences (sq. ft., bedrooms, baths, etc.) to reach my appraisal. His reasoning was captured o[n] the form.The low-ball appraisal, at least in NYS, would have had a corresponding work-up. Ditto the second. This requires the two appraisers to put their thought processes down in black and white. How do they differ?
If there is no written basis presenting market facts, then we just have opinions.
Another commenter says:
Appraisers use special software, but it's only as good as the data they put into it. If they consistently grade the level of finish a little bit lower for the Black-owned homes, the software spits out a big difference in final price. The comps they choose also play a big part. I've seen comps that were a stretch, to put it mildly, even when there were other nearby homes that were better matches. Lemme put it this way: appraisers have a lot of techniques to push an appraisal in the direction they want.
WaPo seems to be mainly reporting allegations in a lawsuit.
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52 comments:
The lawsuit will lose. It is all opinion.
let me see, if i've got this straight?
These Black Folk.... OWN their homes??
The appraisers are low balling the taxable value of their homes . . .
WHICH LOWERS THEIR TAX BILLS!!!!!!!!!
The Black Folk, are complaining (SUING!!!!) because their tax bills are Too Low!??!?
When you sell a house, you sell it for what the buyer wants to pay; NOT the appraised value
Are they wanting to refinance? And take cash out (putting themselves under water)??
Are they complaining (SUING!!!) 'cause the appraisers aren't helping them ruin their lives?
Someone fill me in? I'm suffering from a Traumatic brain injury* and don't understand
suffering from a Traumatic brain injury* a year after the accident, my friend Ben asked:
"How Long are you going to keep using that excuse?"
"ALL MY LIFE" said I
A few things struck me-
Certain parts of the country (like mine) have seen some appraised values double year over year in 2020-2021 because of people fleeing liberal shithole cities. I have never seen a real estate market with demand so high and inventory so low- TX FL SC NV are places where real estate agents have waiting lists of clients ready to buy homes they have never seen.
The replacement of the black things with the white things sounds like a decluttering…
If the appraisal was for a loan approval often the appraisers aren’t necessarily seeking a market oriented listing price but a solid basis for LTV. We’ve seen some weird numbers from loan appraisers…
Valuation with comps is an inexact science with too little data. Year old sale prices are too old. etc etc…none of those things is inherently racist….
Realtors I have used recommend that the seller remove most of the personal photos, decorations, etc to give the house a generic look that a potential buyer can relate to. Also, as anyone who has been paying attention can tell you the real estate market over the last year has been nuts all over. The house I sold in NC 16 months ago has appreciated over 25%, as has the house I bought in FL. Over the same period my AL beach condo, based on sales figures of similar 3BR/3BA units in the building, has appreciated 30%. If someone had a house appraised last January it's not going to be comparable to an appraisal six months later. Houses where I live in FL are projected to appreciate 18% during the next 12 months. In really hot markets like CA multiple potential buyers can bid up a house by 10s of thousands above the original asking price. None this has anything to do with the race of the seller. It has to do with marketing and the local market.
Needs a "smells like bullshit" tag
Oh lordy, those poor oppressed black folks who have to live in a home that only appraises for 465,000.00! The horror! Such racism. Such oppression!
I wouldn't know how to do an appraisal in a market like this one. A house four doors down, identical to our little hovel, sold for $50k over asking price on day one. With inspection waived! Yes, the buyers are Californians, coming here to bring their lefty shithole attitudes to the unenlightened.
As the few comments here point out, there are dozens of variables that can come into play. As noted in comments, decluttering is at the top of any real estate brokers to do list.
As a buyer, I place a higher weight on the inspection, than on the furnishings. But I work hard to tamp down emotional responses and attempt to focus on the possibilities, rather than than the current state of the house. Location, location, location. That's still the biggest variable.
Let's see: IN, CA, OH are all mentioned in your squib. I guess real estate isn't about "location, location, location" after all. Lots of people are moving from the People's Republic of Illinois and the cruel reign of Jabba the Gov to the Free State of Indiana. I suspect prices have gone up fast in Indiana.
Unfortunately, I have stopped believing anything I read in WaPoo or NYT, particularly on topics like this. They want to tar white people exclusively with the brush of racism. I smell a rat.
Florida property is in it's own universe. You don't need an agent you just need a yard sign. I had an inherited 100 year old colonial (in a great integrated older close to the center urban neighborhood) that appraised for $350K two years ago sell for double that two days after it was put in the market with a nice que of back up buyers waiting in case the first buyer stumbles. Buyers from northern Virginia, New York and New Jersey are throwing money at property in Florida. Race just doesn't seem to matter here on either side of the equation.
Unless the house is being taken by eminent domain, the appraisal has little effect on the sale price. The biggest problem with the lawsuit may be inability to prove damages.
First I note that there were (at least) three homes mentioned in three different states. Second, in my experience, appraisals in connection with home purchases are usually obtained by the buyers, to support a loan application, in which case, the appraisers have an incentive to inflate the value. When owners obtain appraisals, it is often for tax purposes, so that appraisers have an incentive to deflate valuations. Also, home prices have been rising generally over the last couple of years.
But I guess the thesis, or implication of the piece is that independent appraisers from Ohio to California consistently undervalue homes owned by black folk because: 1) They want black people to stay where they are,, and not sell their homes; 2) They want to make it harder for people seeking to buy out black homeowners to get loans at any given sales price, 3) They want black people to succeed in selling their homes, but for lower prices, so that black people will have less money to buy new homes with, or 4) They are so blinded by their White Supremacist (!) hatred of black people that they find the idea of a high value black-owned home "inconceivable".
Staging is a huge consideration these days. I'm sure if you decorated your house with modern white trash kitsch with family photos looking like a cavalcade of The Biggest Loser rejects, the appraisal would be depressed as well.
Take Zillow, Redfin and Realtor.com and average out the value of the property. It usually comes pretty close to what the appraiser will come up with. Next question is what do want the appraisal for? For selling purposes? Mortgage? HELOC? Estate valuation? Fighting property tax valuations? Same property appraised each of these reasons will result in different valuations. Learn from the photos shown on these sites. The more the property looks a staged property the higher the selling price. Buyers want to buy their home, not your home. The less personalized the staging, the better.
For top-end homes, there is an industry called "staging" or "dressing" a home to improve its appeal and thus selling price. It might include a complete replacement of furniture and pictures and....piano or not.... Talked to one practitioner who said she surveys a house, lists what is necessary, the necessaries are put on trucks and the entire crew shows up. Said their warehouse is so well-equipped that it's been several years since she needed to acquire anything specifically for a client. Then, of course, the stuff is retrieved and warehoused for the next client.
I imagine the price of such an exercise is pretty high and thus expected to more than pay for itself.
From which it follows that, in the absence of such professional attention, some homes almost certainly appeal more or less than the actual bones of the house justify when a buyer looks at it. And the same might go for an appraiser.
Comps are funny. We live on a lake. One guy comped us with homes not on a lake. LOCATION, dummy. Got that fixed.
"Are they wanting to refinance? And take cash out (putting themselves under water)??"
That's what I got from the article. We're told that they bought a house "off market" from someone who wanted to help a black family own a house, then they embarked on improvements, using the equity in the house.
I guess it would be too much for the reporter to get .pdfs of all the appraisals and link to them in the story. I'm much more interested in primary sources than the opinions of plaintiffs in a lawsuit.
Makes sense.
Marin county in CA is a hotbed of Klan activity.
100% BS.
WaPo seems to be mainly reporting allegations in a lawsuit.
The Austins, according to the lawsuit, believe the first appraiser, Janette Miller, gave them a lowball valuation because they’re Black.
Allegations in a lawsuit are, pretty much by definition, ridiculously one-sided, self-interested, and geared for maximum self-righteous outrage.
But journalists routinely report this nonsense with a straight face. Why? Pretty obvious. Lawsuit allegations tell an extreme, ready-made story that is easy to report. Honest stories are rarely as good a read. So the journalist has a choice: report the BS allegations in a lawsuit or don't write a story at all.
You always remove personal affects from a house that you are selling. Everyone removes personal affects if they want the most money.
Not just Black people.
Houses are purposely staged with as little personality as possible. They are supposed to be a blank slate that the perspective home owner can walk into and feel themselves filling it out.
With THEIR stuff.
Toothbrushes and family pictures are a giant no no.
They should sue the first appraiser, not for racism but for incompetence. Did they review the appraisal report to see which homes where referenced and how their values were adjusted to fit their home? Is their home rural, suburban or urban. That will make a big difference in the number of recent sales.
We had to get an appraisal of the future value of our new construction which is in a rural area. The appraisal report had six recent sales which were within a few miles in rural areas of King County. The appraised value was about the same as my own appraised value based upon Zillow values of nearby homes. The apprarisers here are very busyy and it took over aa montth to get an appraiser thena another mtontth to get hsis repport.
(My srcreen has goon woonky and s not tdispplaying properl)
My bet is this is about the trappings of CLASS/TRIBE, not race. If the belongings of a working class white family had been swapped in, the value would have gone even lower. Is that a race issue? Not completely, and cetialy not as implied by the accuser.
Maybe I'm missing something, but I can't see how the California couple's story proves anything except that the appraiser who lowballed them wasn't necessarily a very good appraiser.
Who cares? Oh poor rich black people.
We have massive institutional discrimination against average white people. And Asians can't get into ivy league schools despite their academic records. But, the Wapo/NYT's which cheers that, has endless stories about Poor Black people somehow getting discriminated. They literally have to scour the country for these sort of stories.
From the Mercury News article about the suit "The suit asserts that appraising a house in Marin City using comparisons of other property sales located exclusively or primarily in Marin City results in a skewed and race-based valuation of the property." I can't image this suit winning. Of course you use Marin City properties as comps for Marin City properties! To do otherwise is malpractice.
“Realtors I have used recommend that the seller remove most of the personal photos, decorations, etc to give the house a generic look that a potential buyer can relate to.”
My partner is a trained interior designer, with several of her interiors in Architectural Digest. We removed our personal stuff from our last house, and it still knocked your socks off. Nope. Realtor wanted everything out. He insists on it, because he believes that potential buyers want to envision the house with their own stuff in it. It did take a week or two then to get a good offer.
It reads like a story written to fit an agenda. One can imagine so many ways to re-write it, and still be technically correct - the real estate game is flush with characters with all shades of integrity, most of them irrespective of race. At its base, it simply sounds like someone took a hard look and then intelligently improved their strategy by taking a different tack on their quest to sell their home for the highest amount.
In my experience bank appraisers can vary wildly in quality. We had one for a refinance who placed our home in the wrong neighborhood on his report, valued it under what we'd paid for it 8 years previously, used comps from miles away despite there being comps on our block, and spent the entire inspection trying to convince me to "sell this dump and move to XYZ far-off suburb" in another county, where he was a realtor. Needless to say we didn't refinance with that bank (which was a very large national bank). When we finally did refinance with another lender, that appraiser valued the house at 50% more than we'd paid, his report made perfect sense, and everything went well. Most of the value of our home is in the land, not the structure, and I think that confused the suburban realtor, who'd never seen a lot worth more than $50k.
Achilles said...
You always remove personal affects from a house that you are selling. Everyone removes personal affects if they want the most money.
Not just Black people.
Houses are purposely staged with as little personality as possible. They are supposed to be a blank slate that the perspective home owner can walk into and feel themselves filling it out.
With THEIR stuff.
Toothbrushes and family pictures are a giant no no.
12/7/21, 9:03 AM
Exactly this. I sold a house in SC. Completely staged by the realtor. Went for more than the asking price pretty much before it went on the market. I looked at the photos, and even I thought I'd buy it from myself!
I grew up in a neighborhood with a mild amount of "White Flight". The guy who lived across the street moved out when a black family moved next door to him. One of my friends from around the corner sold their house to a black family, and their next-door neighbors refused to speak to them.
THAT was racism.
This is an attempt to "prove" inherent racism in housing markets, and to relive the glory days of the 60s and 70s when true racism raged.
Stories like this don't help at all. They only serve to cement the confirmation bias of people who believe that White Supremacy is rampant across the country.
It's all racism.
WaPo writing up a confirmation bias article for their readers. It is not a market-based article. It is an article developed to carry the narrative on forward. Nothing more.
What's missing here is why the offending appraiser would do that.
Professional appraisers get paid to do appraisals. For this story to make any sense at all, it would have to include "appraiser found a way to make more money by appraising to a false, low value".
That's why we strongly suspect BS here. Even after we were suspicious given where the story was published, and that publication's normal pushing of racial hatred motivated by imaginary racial hatred on the other side.
Comparing a house value from last year to this year is absurd. The housing market has changed tremendously in that time. For that matter, the house I own has been valued at significantly more and significantly less than its current value over the past decade; the market has been quite volatile since the housing bubble formed.
As other commenters have said, the motivation of the appraiser is highly dependent on what the purpose of the appraisal is and who is paying for it. When I was buying my house, my realtor was concerned that I might be paying (somewhat) over market for it and therefore I was at risk that my mortgage application would be denied, so he intentionally tried to nudge the appraiser to appraise the house at the agreed price. If I had been trying to negotiate the price down, I am sure the realtor would have been doing the exact opposite.
That said, I will not deny that some experts are not very good at their jobs.
I wonder if there is a kind of staging which is "black" themed (like Michelle's White House redecorating) and how well it helps in a sale? The article doesn't explain why the family didn't stage and yet to stage or not to stage is an issue in every sale these days. Maybe the "white" decorations were just a sort of home-made staging that the neighbors did to help the family.
"We're told that they bought a house "off market" from someone who wanted to help a black family own a house ..."
That sounds kind of .... racist.
My house appraised for $320,000 when I bought it in October 2019. When I refinanced in March 2020 it appraised for $438,000. By now it would probably be closer to $530,000 due to recent sales activity. Ironically, the only pictures hanging in my home are paintings of black New Orleans musicians and dancers.
They'll need to actually SELL their house before they can find out who to sue. It could be the second appraiser who didn't appraise properly.
Then again, lots of folks have seen their houses go drastically up in value over the prior year.
And appraisals have much more to do with who lives around the house than who lives in the house.
So yeah... I call bullshit, too.
Confession: I didn't read the article, but these are my opinions based on the facts of the matter as I have appraised them.
When I bought my brand new house in El Cajon I paid $144,000. When it came time 2 years later to move I wanted to sell it, fast. My realtor suggested listing it at $180,00 to sell it fast. I had been following the local market, My neighbor, with a few more yard improvements, had his listed for $210,000. We listed for $199,000. 50s and 100s are psychological barriers. The realtor held open house on Sunday. Monday we accepted an offer for $196,00. We were in the house during the showing. The one small detail almost everyone remarked on who had been to other houses? "Look, the have handles on the cabinets and drawers!" That was one of the first things we did on moving in- put actual handles and knobs on doors and drawers. And it helped sell the house.
I've tracked sales history of several former houses of mine. At one point- it sold for just under a million. The last time it changed hands according to Redfin it sold for $185,000. One real estate site values it today at $718,000, another at $809,000. And when it sells, it will be for whatever a buyer is willing to pay. Everything else is just guesswork.
And looking at google street view- I can see all kinds of renewable energy scams, probably taxpayer subsidized. Solar panels on many sloped roofs. On both slopes... The ones facing north aren't producing squat.
So, what did Zillow say the house was worth?
Litigious bastards. I hope they lose their shirts in this lawsuit ... or the shirts they borrowed from white people.
Why is it left til the final graf to mention that this is Marin City? MC isn't your average neighborhood. It dates from WWII shipbuilding days (like Richmond on the other side of the Bay) and was originally the home of overwhelmingly-Black workers brought to the West Coast for the purpose. Its relationship with the rest of Marin County has been, to say no more, fraught. (There's a school district combining ultra-rich Sausalito and Marin City, which is inveigled in the first desegregation case in CA in fifty years.)
No one who knows anything at all about this history could assume that a MC house, however brilliantly expanded and renovated, had historically been the property of white people. MC remains overwhelmingly Black, and is literally the only place in the county that has more than trace numbers of Blacks in it. (Hispanics are another matter, but they are largely in very specific places as well, e.g., the "Canal District" of San Rafael.) If this appraiser was hoping to sucker people into believing that this is the only house in Marin City totally untainted by Black hands -- I'm being deliberately sarcastic here -- s/he's dreaming.
Meh. I've had simultaneous appraisals of the same property differ by a factor of two, with the actual sales price ending up almost exactly halfway between the two estimates. It never occurred to me to sue both appraisers for being off by 50 percent, but that may be due to Pale Privilege.
'When I bought my brand new house in El Cajon I paid $144,000.'
Fun fact: 'El Cajon' in English means 'The Cajon.'
It pays to learn...
Obviously need to know more.
But, remember that there is solid empirical evidence of just this kind of discrimination in the job market. https://cos.gatech.edu/facultyres/Diversity_Studies/Bertrand_LakishaJamal.pdf
Most conversation here seems to address the morality of the first appraiser's conclusions.
I wonder about the accuracy.
Do we indeed - on the average - pay less for a house seen as a black residence as opposed to a white one?
Whose morality are we impugning here - the appraiser's, or house buyers' in general?
Sorry, 465 vs 550 is a garbage difference in an uncertain world. What a scam. Get a few appraisals and make a racialized bitch story about the lowest?
In an up market, the second appraisal will often be higher.
"You always remove personal affects from a house that you are selling. Everyone removes personal affects if they want the most money."
Exactly. As Howard suggested, leaving the personal effects of a family (of any color) around will lower the sellability of any home.
So there are advantages to "acting white"?
The figures reported do not support the “value…more than doubled” assertion in the topic sentence. They lost me there and what mild interest it raised dissipated quickly.
The founder of Black Lives Matter, Patrisse Khan-Cullers, has bought four homes for $3.2 million.
I wonder if this is her?
Anyway, you buy a house for $550,000, you spend another $400,000 on the house, which puts your cost basis at $950,000. And you're shocked that it appraises for $995,000? And you want to sue and accuse the people of northern California of being racist?
Maybe you should be happy to live in a blessed society where you can acquire a million dollar property. (Hello! You're a millionaire! It's time to quit bitching about how oppressed you are!)
I don't think all the non-millionaires on the jury are going to have a lot of sympathy.
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