A Black family says they ‘whitewashed’ their home to get a higher appraisal – And they’re not the only ones.
When Erica and Aaron Parker appraised their residence in Loveland, Ohio in 2020, they hoped to make a good sale. The market was highly competitive during this time and houses in the neighborhood were selling for above the listing price due to renovations made by the Parkers.
But, the Parkers were surprised when the initial appraisal of their house returned at $60,000 lower than the list price of the $525,000 they had expected. It was clear that something was wrong.
Courtesy Erica Parker
The Parkers decided to go down a different path and welcomed a different appraiser this time. They removed all personal items that could potentially give away their racial identities, such as artwork or family photos, and replaced them with those of their White neighbors.
When the new appraiser showed up, a White neighbor stepped in for the couple, and their home was appraised at almost $92,000 more than before.
Just a coincidence?
“It was a weird feeling but we felt vindicated,” Erica Parker told CNN. “We were like, ‘Oh my God, we really were discriminated against.’”
It’s believed to be an ongoing systemic problem within the industry, with industry experts attributing it to low levels of diversity and a methodology that provides unskilled appraisers excessive freedom in determining a home’s value.
The most recent US Bureau of Labor Statistics data reveals that in 2022, 92% of property appraisers and assessors would be White, while the number of Black professionals in this field stood at 4%.
Lydia Pope, the President of the National Association of Real Estate Brokers is vocal about her mission to bring more African Americans into the appraisal industry. She believes diversity in this space can lead to better outcomes and more equitable real estate markets.
Every year, the association hosts summits at HBCUs to promote the real estate career to students. Additionally, they also have Pope-led workshops and training programs which existing professionals in the sector can attend to learn appraisal techniques.
“Our concern is that there aren’t enough Black appraisers in the business,” Pope says. “We just want to make a stand that we have to change the culture of appraising.”
Pope condemns the fact that African American homeowners are forced to sidestep their cultural identity and even “whitewash” their homes in order to get enhanced appraisal values. He believes this to be both “disturbing” and “discouraging”.
According to her, appraisers look at numerous factors when assessing the value of a property. This can include the condition of the house, any recent improvements, and comparable properties which were recently sold in the same vicinity.
According to Jillian White, leader of a consultancy providing guidance on how to contest low appraisals, the appraisal process provides appraisers with the opportunity to exercise their discretion and opinion while assessing the worth of a house. This can potentially result in bias.
“I think it’s systemic, implicit, explicit, and structural,” White says of appraisal bias. “You have all these inflection points where making different decisions can lead to a very different result. The methodology is not so hard and fast that every appraiser is going to come up with the same value.”
According to White, the industry should put in measures that offer guidance and security for appraisers so that they do not have such freedom in their operations.
Joshua Walitt, President of the National Association of Appraisers, has said that discrimination among appraisers had nothing to do with methodology and instead blames bad actors for any instances of prejudice. Last year, the National Association strongly condemned discrimination within the industry.
Walitt believes that any bias present has no correlation to the appraisal results generated which are derived from market data.
“If we follow methods and techniques which is what we focus on in education, then what it does is it pushes aside any bias that a person could have,” Walitt says. “If there is bad behavior then we need to let the investigations go through and take care of that.”
Walitt is strongly dedicated to making the real estate appraisal industry more diversified. He actively seeks out new methods to expand recruitment and promote programs such as PAREA, which ease people’s access to the industry by providing opportunities for gaining experience.
According to White, Black homeowners should be aware of potential options if their appraisals are low. She encourages her clients to first try appealing the appraisal and then, if that doesn’t work, they could look into getting a second appraisal.
If the issue persists, homeowners have the option to file a complaint with various regulatory bodies like HUD, the state appraiser board, or CFPB for assistance. White suggests this as a possible solution.
In March, a Black couple from the San Francisco area had a successful legal challenge against a real estate appraisal company. Paul Austin and Tenisha Tate-Austin were able to settle their discrimination lawsuit after the company had undervalued their home by an estimated $500,000.
This continues to show how biased claims can lead to legitimate repercussions.
How do you undervalue a home by half a million dollars?
As part of the agreement, the couple will be awarded an undisclosed monetary amount and the firm is obligated to complete housing discrimination prevention training.
“Having to erase our identity to get a better appraisal was a wrenching experience,” Tate-Austin said in a statement released by her lawyers to the San Francisco Chronicle. “We hope by bringing attention to our case and this lawsuit settlement, we can help change the way the appraisal industry operates.”
Erica Parker sold their Loveland property for a total of $507,500 and invested in a new one in Westchester. Despite this, she submitted complaints to both HUD and the Ohio Department of Commerce stating discrimination – neither has been addressed at this point in time.
Her experience has highlighted that racism is still prevalent in the real estate industry.
“We want the bank and appraisal company to be held responsible for what they did and to prevent this from happening to other people of color,” Parker said.
