8 ms·

Black homeowner has white friend stand in for third appraisal. Value doubles.

70 points by maxwell 5y ago

_dps 5y ago
This is a very large gap, but as someone who has recently had four appraisals done in the space of 6 months (long story), I have had a swing of 40% from the highest to the lowest (in all cases house was unchanged, and appraiser saw me in person each time). Appraisal is very difficult to do well, and different appraisers have different ideas about market trends (part of the reason for my wildly differing appraisals were different expectations for property appreciation in the neighborhood).
NullPrefix 5y ago
Are appraisals connected in any way to taxable property values?
- maxwell 5y ago
  They establish taxable property values! Who appraises the appraisers?
- gumby 5y ago
  In California only indirectly (you can sue to change a tax appraisal you don't like...but the replacement could be higher!) They are required for loans and insurance. Even if you only need a $25K loan for a new kitchen, loan-to-value ratio may be the difference between getting one or not, or a big difference in interest rate you pay.
- pschuegr 5y ago
  Any way to take advantage of this racist bullshit to get a low tax burden but a high sales value?
- antisthenes 5y ago
  Depends on the jurisdiction. In my state/county, the appraisal you get for selling/buying and the appraisal that is done for taxation purposes are not the same thing. The county does taxation assessments separately, without any input from the homeowner, and only at certain intervals (5 years I think). They also tend to be lower than the market value, at least in the post-2008 market. I think it tends to be lower in part to give homeowners a break and in part because they can't assess the quality of the structure, only the land area. So if you've done interior improvements, it obviously won't be captured in the value.
yaml-ops-guy 5y ago
I thought this sounded familiar and had to Google things and because I initially thought this was the same person I read about in 2020 who had this happen to them. Instead it was the same behavior happening to a different homeowner. https://www.nytimes.com/2020/08/25/realestate/blacks-minorities-appraisals-discrimination.html https://www.nytimes.com/2020/08/25/realestate/blacks-minorit...
deleted 5y ago
[deleted]
deleted 5y ago
[deleted]
deleted 5y ago
[deleted]
fighterpilot 5y ago
And if the appraisal value went down, would an article get written about it? Sorry but this N=1 is barely interesting and is nothing more than fodder for confirmation bias. At best it's an indication of a research direction. I get that there's lots of evidence that Black people get discriminated against but putting anecdotes on a pedestal to drive clicks and outrage should be stopped.
- mcphage 5y ago
  > I get that there's lots of evidence that Black people get discriminated against but putting anecdotes on a pedestal to drive clicks and outrage should be stopped. So you understand that it happens, you just wish people would stop talking about it?
  - fighterpilot 5y ago
    I wish people would talk about discrimination that actually happens (for which there's lots of evidence, and which people do talk about), instead of asserting that some N=1 thing which could have many explanations is in fact discrimination when there's no possible way they could know that to be true without having mind reading powers.
    - true_religion 5y ago
      You don’t need statistics to determine that someone has been discriminated against. Here is an example. My friends wife is Latina, and they were buying a house she goes to an open house at 3pm only to be told sorry we already sold. He swings by at 5pm after work, and they are happy to try and sell him the house. This is your classic N=1 sample size. But what can explain why one had a tour, and the other was lied to? You can invent a lot of things if you insist on giving them the benefit of the doubt, but the easiest explanation is discrimination.
      - fighterpilot 5y ago
        Not all N=1 examples should be discounted. Your example is much more believable because there's fairly good reason to suspect that the agent was lying on the basis of nothing more than the race or gender of the person (although there could be other explanations, such as the original buyer pulling out in the intervening time period?). In the case of the OP, there's no reason provided to suspect racism. Merely the correlation created by two or three data points. That's grossly insufficient for drawing such a link and it's also where the article crosses over into outrage stoking and irresponsible borderline misinfo more than anything.
aww_dang 5y ago
It seems reasonable to repeat this process with more homeowners. Three appraisals isn't exactly statistically significant. I wouldn't be surprised at all if Duffy's suspicions are confirmed by further data. However, I would still like to see the data. A Brookings study is referenced, but not much is said about it. Boston made some good points in his defense as well. Who was the third appraiser and what was his methodology?
Tade0 5y ago
The most mind-blowing thing about racism is how arbitrary it is. Can somebody racist fill me in on which features of this person's appearance are allegedly responsible for this situation?
- aww_dang 5y ago
  One of the appraisers responded to the journalist and defended his methods in the article. Without accusing the appraisers of racism, I doubt that the majority of petty racists are aware of their racism. If you take exception with a specific behavior (again without accusing or condemning) it isn't uncommon for someone to reflexively reply, "I'm not a racist!". Very few people are consciously racist, yet discrimination happens. If race did play a role in the appraisal value, it could have been subconscious.
  - slowmovintarget 5y ago
    I think we can forget about trying to determine whether it is subconscious or not. That's silly. Instead, what needs to be identified is what kind of behavior it really is. Discrimination Type Ia: Judging people as individuals regardless of what group a person is in based on empirical evidence. (Ideal. Can be cost-prohibitive to gather the information.) Discrimination Type Ib: Judging individuals based on empirical evidence on the group they are part of. (Less than ideal, but often less costly than Type Ia.) Discrimination Type II: Judging individuals with no basis in empirical evidence but solely based on personal bias or aversion to members of certain groups. (Racism and prejudice.) Each of these behaviors has different qualities, different causes, and in the case of the difference between Ib and II different responses needed from society. If it is Ib, the problem is one of information. If it is II, the problem lies with the individual. I have to say, this feels an awful lot like Type II in this particular case. The article doesn't make a good case for "systemic racism," though. The overall practice may be poor economic incentives leading to Type Ib discrimination. That can be fixed with easier to digest data. This is because the costs, in the case of getting appraisals wrong across the board, actually can and do hit the lenders' bottom lines. But if they don't know that, they won't correct. Classifications are not mine, they are Thomas Sowell's from Discrimination and Dispariites.
LorenPechtel 5y ago
I've heard of this one before, note a key point: "To get that one, Duffy, who is African American, communicated with the appraiser strictly via email, stripped her home of all signs of her racial and cultural identity and had the white husband of a friend stand in for her during the appraiser's visit." She's saying she stripped it of all signs of her racial and cultural identity--but note that this means she stripped it of all signs of her identity, period. It's known in real estate that one should strip signs of one's identity when selling a house as this makes it easier for a prospective buyer to picture themselves in the house. Lacking a control renders this completely useless information. (And it's also possible that something she stripped out was making the home seem unattractive.)
- Ancapistani 5y ago
  > It's known in real estate that one should strip signs of one's identity when selling a house as this makes it easier for a prospective buyer to picture themselves in the house. I would expect that to have an impact on the listing price and the time it was on the market - but not on appraisal.
nunez 5y ago
This is one of the nice things about renting apartments. Even nice complexes like the one we're currently moving out of don't give two shits about race. Life's good as long as you pay the rent on time. We're looking to rent a house. More space for us and our pets. This means dealing with people more directly (through a broker). People have biases. More specifically, people can be racist. My wife (white) apply for a home rental on my (black, Latino) behalf precisely for the same reason. I applied for one myself. She got a call back next day. I still haven't gotten a call back. Racism? Busy realtor? Who knows?
- itsdrewmiller 5y ago
  https://www.urban.org/features/exposing-housing-discrimination https://www.urban.org/features/exposing-housing-discriminati... "Urban’s latest study, published in 2012, found that while instances of overt “door-slamming” discrimination had continued to drop, real estate agents and rental housing providers recommend and show fewer available homes and apartments to minorities than equally qualified whites."
skyde 5y ago
why would you want your appraisal to be high? You would have to pay more tax each year.
- azth 5y ago
  She might be looking to sell her house.
- beej71 5y ago
  She wanted the equity to buy her grandmother's house. Also some states like Oregon have laws that keep the tax rates low even in the face of higher appraisals. I only pay tax on about half my house's appraised value when I bought it. Not sure about Indiana.
Ancapistani 5y ago
I don’t have enough context to feel confident in a position either way on this one. On one hand, yes, having the last appraisal that was apparently conducted for a white family come in higher is a huge red flag. On the other hand, I’ve had drastically different appraisals come back on my own home (~30% delta) and note that the lower appraisals were in early 2020 while the higher appraisal was almost a year later. A lot can happen in even a “normal” real estate market in a year, and 2020 was in no way normal.
Yoofie 5y ago
> To get that one, Duffy, who is African American, communicated with the appraiser strictly via email, stripped her home of all signs of her racial and cultural identity and had the white husband of a friend stand in for her during the appraiser's visit. They gloss over this part. What did they remove exactly? 90% of real estate agents would tell you stage the house before attempting to sell it so you can expand your potential buyer pool and get the most value out of it. Ninja edit: Anyone else find it crazy the value went from $100k in 2017 to $259k in 3 years? Absolute insanity to go up $160k in three years.
- jakelazaroff 5y ago
  Why is that relevant? The appraisal should reflect the value of the property itself, not the belongings inside it.
  - Yoofie 5y ago
    I don't think its relevant. My first reading of that paragraph gave me the impression that she removed stuff from her yard/property.
- yaml-ops-guy 5y ago
  Ninja edit: Anyone else find it crazy the value went from $100k in 2017 to $259k in 3 years? Absolute insanity to go up $160k in three years. You should take a look at the Austin Texas housing market between 2008-2012
- chrismcb 5y ago
  Look, so I haven't read the article. But what did any of this have to do with an appraiser? Had my house appraised several times, never met the appraiser, they never saw the inside of my house. I wouldn't be surprised to know that they didn't even see my house.
- voisin 5y ago
  > Ninja edit: Anyone else find it crazy the value went from $100k in 2017 to $259k in 3 years? Absolute insanity to go up $160k in three years. No Canadian will find this crazy!

70 points by maxwell 5y ago

_dps 5y ago

This is a very large gap, but as someone who has recently had four appraisals done in the space of 6 months (long story), I have had a swing of 40% from the highest to the lowest (in all cases house was unchanged, and appraiser saw me in person each time). Appraisal is very difficult to do well, and different appraisers have different ideas about market trends (part of the reason for my wildly differing appraisals were different expectations for property appreciation in the neighborhood).

NullPrefix 5y ago

Are appraisals connected in any way to taxable property values?

maxwell 5y ago
They establish taxable property values! Who appraises the appraisers?
gumby 5y ago
In California only indirectly (you can sue to change a tax appraisal you don't like...but the replacement could be higher!) They are required for loans and insurance. Even if you only need a $25K loan for a new kitchen, loan-to-value ratio may be the difference between getting one or not, or a big difference in interest rate you pay.
pschuegr 5y ago
Any way to take advantage of this racist bullshit to get a low tax burden but a high sales value?
antisthenes 5y ago
Depends on the jurisdiction. In my state/county, the appraisal you get for selling/buying and the appraisal that is done for taxation purposes are not the same thing. The county does taxation assessments separately, without any input from the homeowner, and only at certain intervals (5 years I think). They also tend to be lower than the market value, at least in the post-2008 market. I think it tends to be lower in part to give homeowners a break and in part because they can't assess the quality of the structure, only the land area. So if you've done interior improvements, it obviously won't be captured in the value.

yaml-ops-guy 5y ago

I thought this sounded familiar and had to Google things and because I initially thought this was the same person I read about in 2020 who had this happen to them. Instead it was the same behavior happening to a different homeowner. https://www.nytimes.com/2020/08/25/realestate/blacks-minorities-appraisals-discrimination.html https://www.nytimes.com/2020/08/25/realestate/blacks-minorit...

deleted 5y ago

[deleted]

deleted 5y ago

[deleted]

deleted 5y ago

[deleted]

fighterpilot 5y ago

And if the appraisal value went down, would an article get written about it? Sorry but this N=1 is barely interesting and is nothing more than fodder for confirmation bias. At best it's an indication of a research direction. I get that there's lots of evidence that Black people get discriminated against but putting anecdotes on a pedestal to drive clicks and outrage should be stopped.

mcphage 5y ago
> I get that there's lots of evidence that Black people get discriminated against but putting anecdotes on a pedestal to drive clicks and outrage should be stopped. So you understand that it happens, you just wish people would stop talking about it?
- fighterpilot 5y ago
  I wish people would talk about discrimination that actually happens (for which there's lots of evidence, and which people do talk about), instead of asserting that some N=1 thing which could have many explanations is in fact discrimination when there's no possible way they could know that to be true without having mind reading powers.
  - true_religion 5y ago
    You don’t need statistics to determine that someone has been discriminated against. Here is an example. My friends wife is Latina, and they were buying a house she goes to an open house at 3pm only to be told sorry we already sold. He swings by at 5pm after work, and they are happy to try and sell him the house. This is your classic N=1 sample size. But what can explain why one had a tour, and the other was lied to? You can invent a lot of things if you insist on giving them the benefit of the doubt, but the easiest explanation is discrimination.
    - fighterpilot 5y ago
      Not all N=1 examples should be discounted. Your example is much more believable because there's fairly good reason to suspect that the agent was lying on the basis of nothing more than the race or gender of the person (although there could be other explanations, such as the original buyer pulling out in the intervening time period?). In the case of the OP, there's no reason provided to suspect racism. Merely the correlation created by two or three data points. That's grossly insufficient for drawing such a link and it's also where the article crosses over into outrage stoking and irresponsible borderline misinfo more than anything.

aww_dang 5y ago

It seems reasonable to repeat this process with more homeowners. Three appraisals isn't exactly statistically significant. I wouldn't be surprised at all if Duffy's suspicions are confirmed by further data. However, I would still like to see the data. A Brookings study is referenced, but not much is said about it. Boston made some good points in his defense as well. Who was the third appraiser and what was his methodology?

Tade0 5y ago

The most mind-blowing thing about racism is how arbitrary it is. Can somebody racist fill me in on which features of this person's appearance are allegedly responsible for this situation?

aww_dang 5y ago
One of the appraisers responded to the journalist and defended his methods in the article. Without accusing the appraisers of racism, I doubt that the majority of petty racists are aware of their racism. If you take exception with a specific behavior (again without accusing or condemning) it isn't uncommon for someone to reflexively reply, "I'm not a racist!". Very few people are consciously racist, yet discrimination happens. If race did play a role in the appraisal value, it could have been subconscious.
- slowmovintarget 5y ago
  I think we can forget about trying to determine whether it is subconscious or not. That's silly. Instead, what needs to be identified is what kind of behavior it really is. Discrimination Type Ia: Judging people as individuals regardless of what group a person is in based on empirical evidence. (Ideal. Can be cost-prohibitive to gather the information.) Discrimination Type Ib: Judging individuals based on empirical evidence on the group they are part of. (Less than ideal, but often less costly than Type Ia.) Discrimination Type II: Judging individuals with no basis in empirical evidence but solely based on personal bias or aversion to members of certain groups. (Racism and prejudice.) Each of these behaviors has different qualities, different causes, and in the case of the difference between Ib and II different responses needed from society. If it is Ib, the problem is one of information. If it is II, the problem lies with the individual. I have to say, this feels an awful lot like Type II in this particular case. The article doesn't make a good case for "systemic racism," though. The overall practice may be poor economic incentives leading to Type Ib discrimination. That can be fixed with easier to digest data. This is because the costs, in the case of getting appraisals wrong across the board, actually can and do hit the lenders' bottom lines. But if they don't know that, they won't correct. Classifications are not mine, they are Thomas Sowell's from Discrimination and Dispariites.

LorenPechtel 5y ago

I've heard of this one before, note a key point: "To get that one, Duffy, who is African American, communicated with the appraiser strictly via email, stripped her home of all signs of her racial and cultural identity and had the white husband of a friend stand in for her during the appraiser's visit." She's saying she stripped it of all signs of her racial and cultural identity--but note that this means she stripped it of all signs of her identity, period. It's known in real estate that one should strip signs of one's identity when selling a house as this makes it easier for a prospective buyer to picture themselves in the house. Lacking a control renders this completely useless information. (And it's also possible that something she stripped out was making the home seem unattractive.)

Ancapistani 5y ago
> It's known in real estate that one should strip signs of one's identity when selling a house as this makes it easier for a prospective buyer to picture themselves in the house. I would expect that to have an impact on the listing price and the time it was on the market - but not on appraisal.

nunez 5y ago

This is one of the nice things about renting apartments. Even nice complexes like the one we're currently moving out of don't give two shits about race. Life's good as long as you pay the rent on time. We're looking to rent a house. More space for us and our pets. This means dealing with people more directly (through a broker). People have biases. More specifically, people can be racist. My wife (white) apply for a home rental on my (black, Latino) behalf precisely for the same reason. I applied for one myself. She got a call back next day. I still haven't gotten a call back. Racism? Busy realtor? Who knows?

itsdrewmiller 5y ago
https://www.urban.org/features/exposing-housing-discrimination https://www.urban.org/features/exposing-housing-discriminati... "Urban’s latest study, published in 2012, found that while instances of overt “door-slamming” discrimination had continued to drop, real estate agents and rental housing providers recommend and show fewer available homes and apartments to minorities than equally qualified whites."

skyde 5y ago

why would you want your appraisal to be high? You would have to pay more tax each year.

azth 5y ago
She might be looking to sell her house.
beej71 5y ago
She wanted the equity to buy her grandmother's house. Also some states like Oregon have laws that keep the tax rates low even in the face of higher appraisals. I only pay tax on about half my house's appraised value when I bought it. Not sure about Indiana.

Ancapistani 5y ago

I don’t have enough context to feel confident in a position either way on this one. On one hand, yes, having the last appraisal that was apparently conducted for a white family come in higher is a huge red flag. On the other hand, I’ve had drastically different appraisals come back on my own home (~30% delta) and note that the lower appraisals were in early 2020 while the higher appraisal was almost a year later. A lot can happen in even a “normal” real estate market in a year, and 2020 was in no way normal.

Yoofie 5y ago

> To get that one, Duffy, who is African American, communicated with the appraiser strictly via email, stripped her home of all signs of her racial and cultural identity and had the white husband of a friend stand in for her during the appraiser's visit. They gloss over this part. What did they remove exactly? 90% of real estate agents would tell you stage the house before attempting to sell it so you can expand your potential buyer pool and get the most value out of it. Ninja edit: Anyone else find it crazy the value went from $100k in 2017 to $259k in 3 years? Absolute insanity to go up $160k in three years.

jakelazaroff 5y ago
Why is that relevant? The appraisal should reflect the value of the property itself, not the belongings inside it.
- Yoofie 5y ago
  I don't think its relevant. My first reading of that paragraph gave me the impression that she removed stuff from her yard/property.
yaml-ops-guy 5y ago
Ninja edit: Anyone else find it crazy the value went from $100k in 2017 to $259k in 3 years? Absolute insanity to go up $160k in three years. You should take a look at the Austin Texas housing market between 2008-2012
chrismcb 5y ago
Look, so I haven't read the article. But what did any of this have to do with an appraiser? Had my house appraised several times, never met the appraiser, they never saw the inside of my house. I wouldn't be surprised to know that they didn't even see my house.
voisin 5y ago
> Ninja edit: Anyone else find it crazy the value went from $100k in 2017 to $259k in 3 years? Absolute insanity to go up $160k in three years. No Canadian will find this crazy!