This week’s episode of The Real Word referenced a New York Times article about a couple’s experience with appraiser bias.
Homeowners Nathan Connolly and Shani Mott welcomed an appraiser from 20/20 Valuations into their home last summer, hoping to refinance at a lower mortgage rate.
Despite rising home values and renovations, the appraiser put the home’s value at $472,000, a slight increase from their purchase price of $450,000 in 2017. Based on that, loanDepot denied the couple a refinance loan.
Dr. Connolly, a professor at Johns Hopkins, knew exactly why. He, his wife, and their three children are Black. And much of Dr. Connolly’s research focuses on the role of race in the U.S. housing market.
So, the homeowners put the appraisal system to the test—and it failed miserably. Months later, the couple reapplied but removed family photos and had a white male colleague stand in for them. The second appraiser valued their home at $750,000.
Stories like this keep popping up. And it’s worth asking whether the appraisal process as we know it should still have a place in the industry.
The biggest joke in the industry
BAM posted a clip from The Real Word highlighting this question and asking agents to weigh in on the appraisal process.
Aside from the impact the NYT article (not to mention the lawsuit) will likely have on the Maryland appraiser who massively undercut the value of this couple’s home, this case shines a spotlight on the flawed nature of appraisals in general.
And agents on Instagram were quick to weigh in.
An avalanche of agreement
Most of the comments on Instagram expressed agreement with the post, with many recounting their own experiences.
“What’s the solution?”
A few commenters asked what could take the place of appraisers in the real estate industry—especially since mortgage lenders rely on them so heavily.
