Lack of diversity in appraisal industry called into question
NASHVILLE, Tenn. (WSMV) - “I was already concerned because I deal with it almost every day in my industry,” Joan Fleming said.
Fleming is a homeowner and works in the banking industry. She knows firsthand how subjective the appraisal process can be.
“Our house ended up appraising for about $300,000 less than what it should have appraised for,” Fleming said. “We had another appraisal done and had a non-African American real estate friend come in and sit and the appraisal came back $300,000 more in a matter of a two-week period.”
Fleming said the outcome was frustrating, but not surprising.
“People work hard to buy homes and they’re paying for their homes and their dream is the same as the next person to build equity, and the only way they can do that is having a fair shot and a fair appraisal,” Fleming said.
Corey Hammonds is an appraiser in Nashville. He sees a direct connection between the lack of diversity within the industry and how it impacts Black homeownership.
“There’s a lot of gentrification and revitalization going on in urban communities and so, if you don’t have someone that’s an expert in those neighborhoods and in those communities and don’t really understand what’s going on from street to street to street, a lot of times, people’s homes could be undervalued,” Hammonds said.
According to the Urban Institute, 89% of all property appraisers and assessors are white. Only 2% are Black and 5% are Hispanic.
“The degree to which appraisers may undervalue, say homes in Black communities, will have important implications for wealth building,” Michael Neal, Equity Scholar & Principal Research Associate with the Urban Institute said.
Neal said the industry as a whole needs to become more inclusive.
“The home is oftentimes the biggest asset on Americans’ balance sheet, and even more so for Black Americans,” Neal said. “When you reduce the home value, when the home value is reduced due to under evaluation, it has important implications. It lowers the amount of wealth that you have.”
Fleming’s experience has now become her motivation to create change, tackling what she feels is a systemic problem.
“When you just start keeping notes and keeping tabs on things that you know need changes, adding it to your list of other racial biases that need to be addressed,” Fleming said.
Hammond said there are a few things he feels can be done now to increase diversity in the industry: mentorship, access to grants and scholarships gearing toward minorities, and providing exposure to the industry for people who live in low- and moderate-income neighborhoods.
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