The core foundation of the sales comparison approach to real estate appraisals is the quality of the comparables used and adjustments made to those comparables to arrive at a value for the subject property. In previous articles in this series we discussed two major topics – understanding the characteristic similarity of the comparable properties to the subject and ensuring the value adjustments for any variations are appropriately applied. But, while the comparable may be similar to the subject, the choice of certain comparable properties may indicate bias in the appraisal process. We will dig into these concerns further in this article.
Bias in Property Valuations
In recent years property valuation bias has gained much needed attention. Lenders and appraisal management companies are striving to discover and eliminate any potential bias in the appraisal before the value information is used in lending decisions which can determine if a family gets to purchase a home and build wealth for generations to come or rent a home that only results in an ongoing expense. Read the complete article on Profet website.
