I'm an older person,
so you know throughout history
they always said, oh, you know,
communities that are primary black are
lower value and I don't believe that.
It is something that is very concerning
'cause the House is the House and it
should be valued at what it should be
valued at regardless who lives in it.
So we added this deck in that patio.
We're not sharing this man's name,
nor are we showing his face.
He's asked us not to because of his line of
work and for the purposes of our report,
will call him Jim.
That's a sign that something is wrong,
but even with Jim's identity concealed,
he said he couldn't hold back his
story after hearing his former
neighbors were Shonda Ingram Harvey.
And her husband, Derek, detailed their
alleged encounter of appraisal bias.
We lost about $60,000.
Jim Story begins in 2012.
That's when he says he bought this
five bedroom home in Prince Georges,
Marlboro Ridge community,
known for its amenities and
on site Equestrian Center,
it's a majority black high end neighborhood.
He's one of the few white
families who lived there.
I mean, I love this neighborhood.
I love all my neighbors
here. He paid about $820,000 for the house.
It was this past summer when the House
had to be appraised again in June,
July. We applied for to do a HELOC loan
and so we had the House appraised for that
he locked stands for home equity,
line of credit, it's alone where
homeowners can borrow against the equity
they've accumulated in their houses.
We filled out all the paperwork,
credit union and they ordered
the appraisal be done.
They said it would be a drive by appraisal.
Didn't cost us anything,
and an appraiser came by drove
by the house, took pictures and
then did an appraisal report
a few weeks later, the appraisal report came
back. When I saw it, I saw
that it was pretty low. As
the report said that the
House was worth $785,000,
more than $35,000 less than what it
costs them to buy. Nine years ago
I said this is wrong,
and so they they ordered a full
appraisal that I paid over $500
for the appraisal company came out.
They did a walkthrough.
They took measurements.
There's two guys and they
walked around the house.
They, you know,
annotated everything.
We've had it to the house.
The walkthrough appraisal
came back in 920,000 dollars,
$135,000 more than the first appraisal.
You know, it's just amazed me.
We took Jim's case to real estate appraiser
Jennifer Gausman for an outside opinion.
She has 15 years of experience and
as an expert in DC real estate,
she holds a license in Maryland.
Two, we want to be absolutely
clear she wasn't involved in James
Appraisal hasn't seen Jim's home,
and is only assessing the
documentation provided.
And she's not providing a value opinion.
As well, but looking at the
documents she says a few things.
Catch her eye
so they did a limited scope which
is even smaller scope than a
drive by if you read that report,
the appraiser was thoughtful that
the overall neighborhood values
for the last 12 months was 750.
Something like that.
I did my own research and that's correct.
If you just do and a one mile radius.
Of that of his home for the
last 12 months I picked a size
of over 3500 square feet,
even though his house is 5100 square feet.
The median value is 750.
She also noticed something about
the comps or what's known as the
comparable homes which are used
to justify the value of a house.
However, the comparables that are
on that appraisal report every
single one of them was from 2020.
And the effective date was a 2021 date,
so all of the comps are older and
all of them are over 2 1/2 miles to
up to four and a half miles away.
I don't think that's a great report,
but it's it's a limited scope appraisal.
I don't think that that product
is necessarily a great product.
Gosman says when determining a homes value,
she prefers to use recent
comparables within months,
or at least the same year as the
home that's being appraised,
and she prefers to find those comparables
within 1/3 of a mile of the appraised home.
She says the closer the compareable,
the better the value analysis.
She also recommends getting a full
appraisal where appraisers go inside
and inspect your home up close.
The differences were evident in Jim's case,
the person came into his house.
All of those comparables,
and this is important.
Are from 2021 and they are all
within half a mile from his home.
Those are the comps of his house.
They were all also over 5000
square feet in size and his
appraisal value is 920 because
that's the report that is correct,
Guzman says.
While some might argue issues like
this are a form of appraisal bias,
she suggests other factors are at play.
Often homeowners may not understand
what other similar homes in the
neighborhood are selling for or may think.
Certain upgrades add value to a house,
when in fact they don't.
Guzman says appraisal bias is difficult
given how appraisers are regulated.
Appraisal
reports are governed by Congress
and the Appraisal Board and
the Appraisal subcommittee,
and we certify that our appraisals
are unbiased with race, Creed,
religion, age, marital status,
color, sex, neighborhood boundaries.
So while I'm sure that there are bad
people that exist in the world that
want to do a mean thing to some person.
I can't imagine that this.
Could stand.
To exist.
Gosman also recommends homeowners become
experts in their neighborhood and adds
that if something isn't
correct on an appraisal,
be sure to ask for a consideration of value.
And if you feel something else is going on,
don't hesitate to file an official complaint.
And if you need to file that complaint,
we have listed all the ways that
you can do so by heading over to our
mobile app and our website, wsa9.com.
I'm Larry Miller back to you.