NCRC Appraisal Bias Study: An Update on the Full Results

Two different appraisal values do not, by themselves, prove racial discrimination. That is the central point missing from a headline about an interracial couple receiving two values for the same house.

My concern with this story was always the leap from a difference in opinion to a conclusion about the appraiser’s motives—and then about the appraisal profession. The right question is whether the work supports the value. Here is what the fuller record shows.

This is the earlier summary retained from this page. The analysis that follows expands and qualifies that coverage.

The full results: three higher each way

NCRC recruited four couples for seven tests. Six produced a completed pair of reports; one did not. The table includes every test, including the incomplete one.^[1]

Source: NCRC’s report and accompanying results table. “Higher” describes a comparison, not which appraisal was correct. Test numbers are not seven separate homes.

Across the six completed pairs, the totals were $2,377,000 for Black partners and $2,418,000 for White partners. That is an average difference of $6,833.33 per pair, with three results higher in each direction.^[1]

The dollar differences still deserve examination. But a higher appraisal is not automatically the accurate appraisal, and the lower one is not automatically an undervaluation. Neither a simple average nor an even split tells us why an individual appraiser reached a particular conclusion.

What the follow-up reporting added

In Working RE, publisher Isaac Peck challenged the conclusions drawn from this small set of tests. He reported that the appraiser involved in the $40,000 and $46,000 White-higher comparisons was Black. He also reported that a different appraiser criticized for an approximately 11-week delay had experienced a medical emergency affecting all of his reports during that period.^[3]

These are attributed accounts from the follow-up reporting, not findings from a court. An appraiser’s race alone does not settle a bias allegation, but the reporting adds context that deserves consideration before assigning a motive.

The repeat involvement is documented in NCRC’s own complaint: the same respondent produced the $310,000 valuation in one test and the $553,000 valuation on a different property in another.^[2] It would therefore be inaccurate to treat those comparisons as two independent examples involving two different accused appraisers.

My reading is that repeated properties and appraisers, a small sample, and different people preparing each paired report make a sweeping conclusion about the profession especially difficult to defend.

What this update corrects—and what remains unverified

I do not stand behind the inference that the reported price gap, by itself, proved racial discrimination. The complete results and subsequent reporting deserve a more careful explanation than the original headline provided.

This was organized mystery-shopper testing, with deliberately arranged presentations of the homes, as the complaint describes.^[2] That design was disclosed. It does not establish that the appraisals or participants were invented.

As of this update, I have not located a public final HUD decision or court ruling establishing that this particular investigation was fabricated, or conclusively resolving these allegations. NCRC’s complaint is an allegation, not a judgment. The criticism is substantial; describing it as a proven political hoax would go beyond the records cited here.

My perspective: appraisers follow the market

As an appraiser, my job is to develop and explain an opinion supported by market evidence. I do not get to decide what a house ought to be worth because I like—or dislike—the person who owns it.

That is why I was skeptical of the shortcut in this story from “two values” to “racism.” Appraisers spend years building their qualifications, experience, and reputation. Deliberately misrepresenting a property would put that work at risk. Those professional obligations matter, even though they are not a substitute for examining a particular report.

The fee should not depend on the value

I am paid for the appraisal assignment, not a percentage of the value I conclude. A higher number does not earn me a bonus, and a lower number does not earn me a reward. That independence is fundamental to the work.

For example, the appraiser’s certification in Fannie Mae’s Uniform Residential Appraisal Report states that employment and compensation are not conditioned on a predetermined value, a direction in value, or a particular result such as loan approval. It also addresses impartiality and prohibits basing the analysis on the race of owners or occupants.^[4]

Buyers compare the house with their alternatives

Suppose the market evidence supports roughly $300,000. Writing $330,000 in an appraisal does not make buyers ignore comparable homes they can purchase for less. This is the principle of substitution: buyers weigh a property against competing alternatives.

The reverse can also happen. A home offered below what buyers believe it is worth may attract stronger interest and competing offers. But there is no guarantee that competition will correct every pricing mistake or produce one exact sale price.

An appraisal informs a decision; it does not command the market. Financing is a separate practical concern: a lender’s appraisal can affect the loan amount, cash required, and whether a transaction proceeds. I explain that distinction further in pre-listing versus lender appraisals.

The property and the evidence should drive the analysis

Family photos, the owner’s race, and personal taste in decorating are not reasons to change a home’s market value. An empty home and an occupied home should be analyzed using the relevant property characteristics and assignment conditions.

Actual damage, maintenance, improvements, tenancy terms, or access limitations can matter. Ordinary belongings should not be confused with physical condition. The report needs to explain which facts affected the analysis and why.

What to examine in an appraisal report

This practical section is retained from the earlier article and updated for context.

Check factual descriptions of the property, neighborhood, condition, living area, comparable sales, adjustments, and any unsupported language. Ask whether comparable sales were selected and treated consistently.

A meaningful review would examine the effective dates, assignment assumptions, market conditions, and the reasoning behind each report. An incorrect measurement or unsupported adjustment can establish a technical problem. Evidence of discriminatory treatment requires its own examination; it should not be assumed from the difference between two final numbers.

For more detail, see how appraisers choose comparable sales. If you are questioning a lender’s appraisal, use our reconsideration of value guide to organize your evidence and work through the lender.