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Appraisal Bias

It is essential that REALTORS® understand the scope and impact of potential appraisal bias to allow us to help our clients navigate this critical phase in the homebuying process. 

What steps can we take to provide relevant information to an appraiser to increase the likelihood of an accurate valuation? How can we support our clients who believe the valuation of their home is “off?” What options are available to our clients in response to allegedly discriminatory, biased, or negligently prepared appraisals? Let’s walk through the process.

An appraisal is an independent opinion of value, performed by an appraiser for a lender in connection with a loan secured by real property. Although the consumer pays for the appraisal, the lender who will be financing the transaction typically orders the appraisal and is the appraiser’s client. The buyer will receive a copy of the appraisal. Remember that the appraiser must comply with the Uniform Standards of Appraisal Practice (USPAP), as well as any additional requirements imposed by the lender, investor, or guarantor.

The accuracy of an appraisal can be impacted by a variety of factors, including the appraiser’s familiarity with the area, the comparable property sales selected by the appraiser, information regarding the subject property and any amenities, upgrades or improvements, and information about the neighborhood. REALTORS® can play an important role in making sure the appraiser has current, accurate, and relevant property information.

It is permissible for a REALTOR® to share information about the property with the appraiserprior to the appraisal. You may provide a CMA with information explaining why you selected those properties. You may provide a copy of the Contract of Sale, together with information about the neighborhood, such as the streets constituting the boundaries of that neighborhood. You may provide information about any features, improvements, or enhancements to the property, including plumbing, electrical, or any “green” features which may not be visible to the appraiser. You may choose to create a package of information and leave it at the property for the appraiser. 

You may also meet with the appraiser at the property. You may not, however, interfere with the appraisal, or attempt to coerce or threaten the appraiser in any way. You may present or share any information that you have with the appraiser, be available to answer any questions the appraiser may have, and then you should step aside to allow the appraiser to do what they were hired to do. 

Another factor impacting the integrity of an appraisal is the appraiser’s competence. “Competence” isn’t limited to whether the appraiser made a mistake regarding the property condition, or if they should have selected different comparable properties. The appraiser should have experience appraising that particular property type and that geographic area. It ispermissible for a REALTOR® to ask whether the appraiser has experience in that geographic area. Appraisers are subject to a code of ethics to determine that they are competent to perform the appraisal. If they are not, they are required to disclose this and either withdraw from performing the appraisal—or they must document how they will become competent. A best practice, for this and every other phase of the transaction, is to document any communications with the appraiser and to retain copies of any information shared with the appraiser.

Everything discussed above would occur before the appraisal is performed. What options are available to your client if, despite your best efforts, the appraiser made a mistake, and the appraisal isn’t accurate? You are probably aware that it is possible for the homeowner or borrower to contact the lender to request a Reconsideration of Value (ROV). A request for an ROV is appropriate if the appraisal contains factual or other errors or omissions, inadequate comparable properties, or if there is evidence that the appraisal was influenced by prohibited bias. 

On its website, the Consumer Financial Protection Board (CFPB) explains the ROV process as follows: 

Responsible lenders focused on serving their customers typically will provide borrowers with clear, actionable information about how to raise concerns about the accuracy of an appraisal. A lender’s reconsideration of value process must ensure that all borrowers have an opportunity to explain why they believe that a valuation is inaccurate and the benefit of a reconsideration to determine whether an adjustment is appropriate. While an individual lender’s reconsideration of valuation process may vary, lenders must make sure that their reconsideration of value process is nondiscriminatory and available and accessible to all.

The CFPB’s explanation touches upon one concern with the ROV process: a lack of consistent policies and protocols among lenders. One aspect that is consistent, however, is that the request for a ROV is made to the lender, who then contacts the appraiser. The homeowner or borrowermay not contact the appraiser directly to request a ROV. Again, a ROV is warranted where there are deficiencies in the original appraisal or critical information is missing from the original appraisal. If the homeowner or borrower wants the appraiser to consider new information, which was not available at the time of the original appraisal, that is treated as a request for a new appraisal, rather than a request for a ROV.

Another area of concern with the ROV process is that the lender is not required to respond or to accept any documentation provided in support of the request for a ROV. Moreover, even where the appraiser considers the request for a ROV but does not change their opinion of value, the borrower is not entitled to receive a written explanation for such decision. While this can be frustrating, it is important to remember that it is illegal to try to influence the appraisal process, and the borrower and REALTOR® must avoid any improper contact or communication. 

What options are available if the lender has refused to consider the request for a ROV, and the homeowner or borrower believes they have evidence of discrimination or negligence on the part of the appraiser? As a preliminary matter, prohibitions against discrimination under the Fair Housing Act and the Equal Credit Opportunity Act extend to appraisals. Maryland law also prohibits appraiser discrimination: 

A [licensed appraiser] may not refuse, withhold from, or deny any person any of the accommodations, advantages, facilities, privileges, sales, or services of the licensed or regulated person or discriminate against any person because of the person's race, sex, creed, color, national origin, marital status, sexual orientation, age, gender identity, or disability.

Md. Code Ann., State Gov't § 20-402 (West).



(Head) When a Homeowner or Borrower Needs Further Help


If the homeowner or borrower has evidence of appraiser negligence or discrimination, they should report it, in writing, to the lender. They may also file a complaint with HUD’s Fair Housing and Equal Opportunity office  In response to increased recent recognition of the extent of appraisal bias, the federal “Appraisal Complaint National Hotline” was created. An aggrieved homeowner or borrower can follow this QR Code below, or they can call the hotline at 877.739.0096. 

If the homeowner or borrower believes that a federally chartered lender discriminated against them, including by using an improper appraisal, they can submit a complaint to the CFPB by following this QR Code: 

If the lender is a Maryland State-chartered bank, State-chartered credit union, or State-chartered trust company, a Complaint may be filed with the Commissioner of Financial Regulation, Attn: Consumer Services Unit 500 N. Calvert Street, Suite 402 Baltimore, MD 21202 Phone: 410-230-6077. Follow this QR Code for more information: 


A complaint may also be filed against an appraiser with the Maryland Commission of Real Estate Appraisers, Appraisal Management Companies, and Home Inspectors, on a form specified by the Commission. Please follow this QR Code: 

Finally, a complaint may be filed with the Maryland Commission on Civil Rights. Please follow this QR Code:


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