Black homeowners have complained that it is difficult for them to get fair appraisals.
In fact, a 2018 Brookings Institution report found that owner-occupied homes in Black neighborhoods are undervalued an average of $48,000. This equals cumulative losses nationally of $156 billion, Brookings calculates.
Appraisals for home purchases in majority-Black neighborhoods were roughly twice as likely to result in a value below the actual contract price (the amount a buyer is willing to pay for the property) compared to appraisals in predominantly white neighborhoods, found a recent report from Federal Home Loan Mortgage Corporation (Freddie Mac).
Some experts say one way to help solve this issue is to increase the number of Black home appraisers. The Black Real Estate Professionals Alliance (BREPA) has created an initiative called “100 Black Appraisers in 100 Days” to recruit Black appraisers to combat bias in home appraisals.
The initiative was announced in late May by Donnell Williams, BREPA president.
For the push, BREPA has been joined with the Appraisal Institute (AI), a global professional association of real estate appraisers.
There are 78,000 appraisers in the U.S. which includes 85.4 percent white appraisers but only 1.3 percent who are African-Americans, according to AI.
“100 Black Appraisers in 100 Days” aims to give Black homeowners greater confidence that they are being treated fairly in the appraisal process, according to Williams in a press release. And the initiative will create jobs in the Black community with salaries that can range from $57,000 to $147,000 annually.
“It’s always been the case of a Caucasian person coming into our properties telling us what the value is,” says Bill Collins, communications liaison for the BREPA. “This initiative is going to change that. Now you will have someone who looks like us who hopefully will be level-headed enough after they go through these apprenticeships to do a fair job for the consumer. Let’s also keep in mind that this is not just about them doing a fair job for those who look like us but being able to work in the industry at large.”
Others in the industry agree there is a major need for more Black home appraisers.
“But Black appraisers have also encountered difficulties navigating similar issues from inside the industry. Many say that while the valuation divide is symptomatic of a larger racial issue, addressing challenges and barriers in a profession with an apprenticeship model — which makes it difficult for people of color to break in — may be one way to widen the industry lens,” NBC News reported.
The industry has not been welcoming to Black appraisers. It was just 70 years ago that the industry opened up to African Americans, Jacob Faber, a professor of sociology and public service at New York University, told NBC News.
Faber added that because there are so few Black appraisers, it’s not clear what impact diversity would have on the industry. But he pointed out that research on the benefits of diversity in institutions would indicate that it could help alleviate some of the racial bias in individual appraisals.