Home appraisal increased by almost $100,000 after Black family hid their race

I wonder if this happened to me.  My tenant is African American and I just received an appraisal that was off by $70k!  Appraiser used 2 comps from 7-8 months ago and then time adjusted upwards of .4% per month.  The market has definitely gone up more than 2.8% over the last 7 months.
 
This 100% happened to someone I knew in Chicago area. It is an Asian man married to an African American woman. The first appraiser, when only the wife was home, gave them an appraisal way under value. The requested a second appraisal and the husband stayed home and they took down family pictures and then the appraisal was significantly higher.
 
Just another reason to get rid of appraisers, most are completely worthless and many real estate agents. When I did the refinance of my home back in Jan 2020 the appraiser appraised my home for $1.18m when I bought it in 2016 for $1.15m and put over $100k in upgrades in it.  The moron used the price per SF from 2-level closed comps in the tract to value my home.  Thankfully my LTV was so low that it made no impact to my loan pricing.  When I got my HELOC in July the appraised value was $1.4m, still low but not as stupid as $1.18m in Jan.  haha
 
USCTrojanCPA said:
Just another reason to get rid of appraisers, most are completely worthless and many real estate agents. When I did the refinance of my home back in Jan 2020 the appraiser appraised my home for $1.18m when I bought it in 2016 for $1.15m and put over $100k in upgrades in it.  The moron used the price per SF from 2-level closed comps in the tract to value my home.  Thankfully my LTV was so low that it made no impact to my loan pricing.  When I got my HELOC in July the appraised value was $1.4m, still low but not as stupid as $1.18m in Jan.  haha
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Just out of curiosity what would be wrong if he used the price per SF from the other comps if they were also recent?
 
CLB_srA said:
USCTrojanCPA said:
Just another reason to get rid of appraisers, most are completely worthless and many real estate agents. When I did the refinance of my home back in Jan 2020 the appraiser appraised my home for $1.18m when I bought it in 2016 for $1.15m and put over $100k in upgrades in it.  The moron used the price per SF from 2-level closed comps in the tract to value my home.  Thankfully my LTV was so low that it made no impact to my loan pricing.  When I got my HELOC in July the appraised value was $1.4m, still low but not as stupid as $1.18m in Jan.  haha
Click to expand...

Just out of curiosity what would be wrong if he used the price per SF from the other comps if they were also recent?
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I think he's implying that he's in a single story home which is valued higher than 2 stories on a $/sqft basis.
 
Cares said:
CLB_srA said:
USCTrojanCPA said:
Just another reason to get rid of appraisers, most are completely worthless and many real estate agents. When I did the refinance of my home back in Jan 2020 the appraiser appraised my home for $1.18m when I bought it in 2016 for $1.15m and put over $100k in upgrades in it.  The moron used the price per SF from 2-level closed comps in the tract to value my home.  Thankfully my LTV was so low that it made no impact to my loan pricing.  When I got my HELOC in July the appraised value was $1.4m, still low but not as stupid as $1.18m in Jan.  haha
Click to expand...

Just out of curiosity what would be wrong if he used the price per SF from the other comps if they were also recent?
Click to expand...

I think he's implying that he's in a single story home which is valued higher than 2 stories on a $/sqft basis.
Click to expand...

Bingo...single story homes trade from 15-20% higher price per SF based upon the last home that sold about 2 years ago compared to a 2-level home in the same tract. 
 
Yes the real estate business is still prime for some innovation. Too many subjectivity including racial bias.
 
I don't know why this is a story - unfortunately there's racist individuals in every line of work.  The appraiser in this case must have had a racial bias which led them (consciously or subconsciously) to appraise the home for less than the actual value.    I bet today somewhere in the US there was a car dealer somewhere that offered an individual less money for their trade in vehicle because of a racial bias as well.  Sad, but it happens all the time, doesn't mean we shouldn't try to change peoples perception, NOR does it mean that all appraisers are racist and this will happen to every homeowner in a similar situation.
 
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