This post was originally published on The Washington Informer
By Angela Swinson Lee
Devin Minnis was between careers when his wife, a loan officer, suggested that he may want to explore becoming a real estate appraiser. He took her advice and has been in the appraiser business for the past two years as an appraiser trainee.
Chris Jackson was flipping houses in Florida when an appraiser came in for 10 minutes and received a check for $400. The market crashed, and Jackson thought it might be time for a career pivot.
Minnis and Jackson are two Black men in an extremely white profession as licensed appraisers, where they assign a value to a property. Appraisals are used by buyers, sellers, and lenders to determine a property’s value and how the value compares to other similar properties in a neighborhood.
According to the Bureau of Labor Statistics, of the 75,000 appraisers in the United States, 97% are white, and most are over 45.
As racial bias in appraisals continues, both men agree that recruiting Black appraisers is one way to combat the problem.
A December 2022 report by Brookings Institute found that homes in Black neighborhoods are valued roughly 21% to 23% below their valuations in non-Black neighborhoods. The report also found that appraisals in majority Black neighborhoods are 1.9 times more likely to be appraised below the contract price than homes in majority-white neighborhoods.
With over 15 years in the appraiser business, Jackson, owner of Jackson Appraisal Group in Bowie, has seen his share of unfair practices.
“It’s when an appraiser goes out of his way to do a lower value, subconsciously or consciously, that is not justified. You go into a white neighborhood, and you see a Black family, and because it’s a Black family, they get a lower value,” Jackson explained about one-way appraisal bias can be defined.
Jackson reviewed a house in Baltimore where the loan amount was based on the value of a home being renovated. The first appraisal was $220,00. The second appraisal was $180,000.
In the first scenario, the appraisal took a comparative market analysis in a four-block radius without crossing major roads. The second appraiser crossed major roads and went to different neighborhoods for comparables in an area where housing varies drastically from block to block.
“When I looked at that report, I thought there is no logical reason for this to happen. My first impression as a Black man is this is racial bias, but it’s hard to tell if it’s racial bias or incompetence,” Jackson said.
He also noticed it on the sale side, where he represented a Jewish friend looking to purchase a home in Bethesda. The seller-agent coached him on how to win the bid. He later learned that the neighbors reviewed the Facebook profiles of all the people who submitted offers and thought Jackson’s client would be the best fit for the neighborhood.
“Basically, that was 2020 redlining,” Jackson said of the incident.
Jackson added that appraisers also need to be geographically competent. He said an appraiser coming from Hartford County needs to understand the geography of Prince George’s County. Although report guidelines exist for appraisers to make an objective decision, sometimes, the reports can be subjective.
“Let’s just say the house is updated, but somebody is cooking food that doesn’t smell right to me. Subconsciously, I might be thinking less of this property. Just think about the fact that you have a human being walking through this house, and their opinions are going to be swayed by maybe things they shouldn’t be swayed by,” Jackson said.
He gave an example of a house he was assigned to appraise where the owner had confederate flags and guns throughout the home. Jackson admits that he was a little apprehensive about entering the home. The way he overcame it was to have a conversation with the homeowner, and they found a connection.
“All of those feelings, subconsciously I may have had, went away,” Jackson said.
Both Jackson and Minnis agree that the appraiser industry needs to be more diverse.
“The thing is that Black families don’t get told about these kinds of careers. It’s passed down from father to son. That’s why it’s so dominant by white males,” Minnis said, adding that recruitment needs to occur at Historically Black Colleges and Universities (HBCUs) to spread the word about the profession.
The post Black Appraisers Needed to Combat Racial Bias appeared first on The Washington Informer.