It’s Fair Housing Month. Here Are 3 Steps You Can Take to Ensure You Get an Unbiased Appraisal

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One of the less talked about issues with homeownership is biased appraisals. Read on to learn about both avoiding and fighting them. 

As a real estate professional, I was always told to trust the appraisal process. Appraisers are highly trained, they know what they’re looking at, and, above all else, they’re unbiased. And, for the vast majority of the appraisers I ever met, that’s absolutely true. But it’s not true 100% of the time, based on new findings by the Brookings Institution.

Although it’s difficult to put numbers to exactly how many homes are affected by under-appraisal, Brookings is trying very hard to at least measure the effect of it. It found that homes in majority-Black neighborhoods are 1.9 times more likely to appraise under their contract prices and had a median appraisal 15% less than in neighborhoods with fewer than 1% Black residents.

That’s not nothing.

Since it’s Fair Housing Month, we thought we’d share some tips to help ensure you have the best shot at an unbiased appraisal this year, whether you’re selling your home or simply planning a mortgage refinance.

(In all honesty, I wish this piece didn’t need to be written at all, but if we can save someone the stress, frustration, and general unfair treatment that comes with a biased appraisal, I’ll feel we’ve done something to make the world a little bit better.)

1. Depersonalize your home

Appraisers are people, too, and sometimes they make very bad choices, consciously or unconsciously. Taking down family photos and removing any items that might be used to identify your religion, race, gender, country of origin, or your familial status may seem extreme, but giving the appraiser a blank slate can help give you an even playing field. If you’re selling, you’ll need to pack those things anyway.

2. Freshen up your curb appeal

It’s an old real estate trick that the better a home’s first impression, the better it will show. That means the appraiser should be greeted with a tidy lawn; well-tended landscaping; maintained fences; and clean siding, doors, and gutters. It’s a little extra work, but the impact can be significant. Just remember that appraisers judge your home based on its condition, which is a highly subjective measure. A better first impression can lead to a better grade overall.

This really goes for anyone, even if they’re not at risk of a Fair Housing violation. It’s just extra insurance if you happen to be a member of a protected class that might experience under-appraisal.

3. Tidy up your interior

Appraisers are supposed to be able to look past clutter, but in my experience, this isn’t always the case. I’ve seen homes gain significant value simply by removing old carpets or decluttering between owners, without any other changes, so I know that tidying up has an effect. Even if you can’t pull out dated carpets, start decluttering your home as soon as you have a contract (or know you’ll be applying for a new mortgage).

Rent a storage unit and start filling it with items that you don’t absolutely need, or borrow a friend’s garage. The less stuff you have in general, the less likely you are to tip off the appraiser that you’re anyone but whoever they envision as the average homeowner.

How to fight a low appraisal

Should your appraisal come in significantly lower than you and your real estate agent anticipated, there are ways to fight it.

1. Ask for a copy of the appraisal

You can’t fight what you don’t know, so get a copy of that appraisal as soon as you find out there’s an issue. Contact the mortgage lender and ask for it directly, or have your real estate agent do it for you, so you can check for actual factual inaccuracies that can be easily disproved.

2. Get a ballpark figure of your home’s value

Ask your real estate agent (or the agent who sold you the house, if it’s a refinance) to perform a comparative market analysis (CMA) to help establish what your home’s value should be. This is, in essence, a portion of what appraisers do to determine your home’s value. A good agent can perform these fairly quickly, especially if they’re very familiar with your neighborhood. Zillow and other online platforms are not necessarily accurate judges of value, and you should not rely on them.

3. Ask for a reconsideration of value

With the appraisal and a CMA in hand, you can request that the bank reconsider the value of your home. If you can prove that other similar homes have sold nearby for the same or more than yours appraised for, or that there’s a factual inaccuracy in the appraisal, you’ve got a lot of reason to demand what is essentially a reappraisal. Again, this won’t work with Zillow data; you’re going to need hard data from a real estate professional. The process at each bank is a little bit different, but you’ll definitely need the documentation to prove your case.

4. Hire your own appraiser

This is not something I would ever suggest anyone do out of pocket until they’ve exhausted all possible angles, because it feels like a tax on someone who has already been discriminated against. But if you absolutely cannot move the bank to do a reconsideration of value (ROV) any other way, you can hire your own appraiser. Usually, the CMA is proof enough, but if it isn’t, a full appraisal will get the bank’s attention, especially if it differs wildly from the one that’s under value.

Federal Fair Housing applies all year long, but during April, we put a point on it. If you’ve experienced discrimination in appraisals, mortgage lending, or other housing issues, it’s important to address it right away.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group. The Motley Fool has a disclosure policy.

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