Towards greater accountability in appraisals.
Over the last few years there has been an increasing focus on the appraisal portion of the real estate transaction to find racial bias. Simultaneously there has been very little focus on lenders and real estate agents that have established histories of documented racism. However, in an effort to further terminate racial bias from all portions of the industry I would propose the following verifiable methods to expose actual bias.
Require that the list of properties considered the "neighborhood" of the subject be disclosed in the report.
The disclosure of this data would enable clients to examine if the comparable selection methods were based on empirical facts or bias of any other variety. By analysis of the list, this would reveal the actual search criteria used for comparable selection. Acceptable criteria include:
Location based on geographic boundaries/community services (schools/amenity proximity)
Style of dwelling
Size of the dwelling
Age of the dwelling
Unacceptable criteria would include:
Arbitrary location selection
Without the disclosure of these data, it is impossible to know the actual mind of the appraiser at the time of the report. While the appraiser may report geographic locations and basic search criteria, a list of properties included in their neighborhood search would define these with no ability to evade. Further, a list all properties used in the neighborhood analysis should be in every appraisal work-file, therefore this data reporting amounts to a copy/paste of existing data. If appraisers are to be a part of exposing and eradicating racism in our profession, transparency is key to the process.