Mary Cummins, Real Estate Appraiser, Real Estate Appraisal, Los Angeles, California, Mary Cummins.

Mary Cummins is a real estate appraiser in Los Angeles, California with 38+ years of experience. Cummins provides real estate appraisals for banks, lenders, mortgage brokers, Appraisal Management Companies (AMCs), lawyers, Courts, factors and private parties for lending, lawsuits, probate, estate planning, divorce and all types of litigation. Cummins provides 1004, 1073, 1025 and other form reports, narrative reports and historical appraisals besides real estate research and appraisal advice.

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Tuesday, September 30, 2025

Plaza Mexico Mall in Lynwood Used to be Montgomery Ward Shopping Center by Mary Cummins Real Estate Appraiser

Plaza Mexico is the largest Mexican themed mall in the US located at 3100 E Imperial Highway in Lynwood, Los Angeles, California 90262. It was originally built in 1972 as a Montgomery Ward shopping center. In March 1986 Montgomery Ward closed because they were losing money. The city of Lynwood offered them financing to stay but they still closed. Montgomery Ward allegedly gave the property to the city of Lynwood. The city of Lynwood also owned the large vacant property next door which they wanted to redevelop into a shopping center.

The property became a clearance center store after Montgomery Ward's closure. Later part of Montgomery Ward was demolished. By 1990 it was reopened by the City of Lynwood as the Lynwood Marketplace. It was then 100 shops in two stories with allegedly 800,000 sf per an LA Times article.

Starting around 2001 Korean immigrant brothers Min and Donald Chae began to turn it into the Plaza Mexico that we know today. The project reopened in 2002 after a $55,000,000 renovation. Per a 2005 LA Times article Lynwood Plaza Mexico replicated a traditional Mexican downtown. The plaza resembles Monte Albam, the ancient Indian ruins in Oaxaca. The shops have bold colors of typical provincial towns. There is a shrine to the Virgin of Guadalupe which I believe became the chapel. The Plaza clock tower replicates the facade of the government palace in Guadalajara. Stones and lamps were imported from Mexico. Tiles on the plaza contain occasional figures from the loteria game. The Governor of the state of Nayarit donated a statue in honor of Mexican mothers. Plaza México has replicas of the Angel of Independence of México City and the kiosk of the Zócalo of San Miguel de Allende, Guanajuato. A kiosk is an open-air structures with a raised platform enclosed by a simple hand-railing, and then covered with a roof to provide shade.

Chae stated he tried to make the Plaza into a Mexican "China Town." He hired Luis Felipe Nieto an archeologist and restoration expert from San Miguel Allender, Guanajuato, to advise him on Mexican designs and colors. Nieto passed away in 2024. Jon Jerde was the architect. Jerde was the architect for theme malls including Universal City Walk, Bellagio and the Wynn hotel. He passed away in 2015.

"Plaza Mexico is an iteration of a Jerde-influenced commercial center. This heavily Mexico-inspired outdoor shopping center, reaches for one of Jerde's most central placemaking ideals; to create authentic social engagement within a constructed, highly curated environment. Plaza Mexico's developer, M & D Regional Center LLC, two Korean brothers named Min and Donald Chae, attempted to build a culturally relevant, themed shopping center that would attract visitors and shoppers."

The Covid lockdown proved devastating to the destination theme mall. In 2021 Donald Chae's Plaza Mexico mall filed for bankruptcy right before a foreclosure sale. Property was sold in bankruptcy in 2022 for $164,000,000 to the Sterling Organization who owns it today.

Today Plaza Mexico hosts many Mexican and Latino events including El Grito de la Independencia, El dia 12 de Deciembre, Mexican Independence day, Dia de Muertos, Cinco de Mayo and more. Mexican politicians and the Consul General of Mexico of Los Angeles have frequent events at the mall.

Physical description: APN 6171-001-054 Legal description MODJESKA PARK VAC STS, BLK 15, 18 AND POR OF BLK 16. Three buildings. Two were built 1972 and the third was built 2002. 475,209 sf lot. 248,925 sf improvements. It's currently owned by Svap III Plaza Mexico LLC out of Florida. Property last sold in 2022 for $164,000,000.

Must sees at the mall.

The main entrance and clock tower 33.92907608122274, -118.21479515463186
Fountain of Independence 33.929250716415645, -118.21448617989691
Kiosk 33.92842989880324, -118.2135573785178
Aztec sun calendar stone 33.92861835984562, -118.21352842649486
Pancho Villa statue and a few other statues at the front of the clock tower entrance
Chapel de la Virgin de Guadalupe
Olmec head replica next to Planet Fitness
Quetzalcoatl fountain
China Poblana statue of a woman just as you enter the main entrance

Eat at one of the restaurants on the second level on the terrace. Don't eat at the food court unless you just want cheap lower quality food in a very loud gaming environment. Be sure to explore the outdoor mall area with the kiosk, fountains, Olmec head, chapel and Aztec stone. Don't just visit the large indoor mall building.

Sunday, November 24, 2024

What will Donald Trump, Scott Turner do to HUD? Same thing Trump Did First Term, Cut the Budget and Programs, by Mary Cummins

Photo: Wikipedia, Donald Trump, Scott Turner, HUD, Mary Cummins, Real Estate Appraiser,

Donald Trump nominated ex-football player, motivational speaker and Pastor Scott Turner to be the head of HUD. Scott was a Texas State Representative for the 33rd District for two terms. He was also on Trump's White House Opportunity and Revitalization Council during Trump's first term. In 2023 he was hired as Chief Visionary Officer (lobbyist?) at JPI a real estate company.

When Turner was on the White House Opportunity and Revitalization Council he co-produced a one year report. That report was the result of the Trump 2017 Tax Cuts and Jobs Act. It dealt mainly with plans to promote investments in Opportunity Zones. A final report released in 2020 stated they were involved in different grant programs. Trump cut the HUD budget at least 18% during his term so grant programs and funding were reduced. That appeared to be a name only PR council and report.

We can expect Trump to again cut the HUD budget. I personally feel some programs are vital and others should be cut. I'd like to suggest HUD cut the funds given to NFHA for defamatory advertisements trashing appraisers. They could also cut the funding for the improper sting operations and lawsuits regarding appraisers. They should also look into the false and frivolous appraiser complaints. Hire an independent real estate appraisal company to investigate to see if the values in question were market value or not. If they weren't, investigate. If they were, dismiss the complaint and send an all clear letter. So much money was wasted on these worthless programs that did not find appraiser bias.

Trump in his Project 2025 plan stated he'd get rid of PAVE. The PAVE Task Force is over and it didn't really change anything. The main purpose was to get black, Latino and lower income votes and to keep campaign promises about solving made up problems. Joe Biden lied and said appraisal bias was a huge problem causing wealth inequality. The real problem is income inequality causing wealth inequality. Biden said he alone could fix the fake problem if they voted for him. The fake problem didn't exist.

We were already doing all of the suggested PAVE programs. We already had appraisal appeal aka Reconsideration of Value ROV processes. We already had mandatory bias, discrimination and fair housing education. We already had a complaint process. We were already planning a PAREA like solution to the mentorship program problems. The PAREA program is not yet successful with only a handful of graduates at huge expense. Appraisers are almost as diverse as real estate agents. The issue is high initial cost, time and inability to make a living in the current market. This goes back to income inequality.

Most people think HUD has the power to solve the housing crisis. It does not. HUD only oversees public housing programs and government backed mortgages. They have no control or jurisdiction over the real causes of the housing crisis which is insufficient number of housing units. That problem is caused by the states, counties and cities building requirements. It's not a problem under the direct jurisdiction of the federal government.

Trump has made some suggestions for helping the housing crisis. He will most likely roll back the Inflation Reduction Act which mandated more energy efficient homes. I doubt the developers will trickle down those savings to the consumer. Trump also suggested using federal lands to build homes. Those lands aren't in areas where people want to live. The last time the government did that developers built cheap shitty homes on swamp land such as Marin City. Trump said he'll reduce interest rates but he has no control over that Department.

It will be interesting to see what Donald Trump and Scott Turner actually do with HUD. I predict they will just reduce the budget and cut programs like Trump did last time. Turner will do a lot of positive press and release a lot of positive reports while he obeys Trump and guts the Department as much as possible.

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Friday, August 23, 2024

RealPage YieldStar Sued by Justice Department for Alleged "Price Fixing" - Doesn't Really Make Sense, by Mary Cummins

RealPage was sued by the Department of Justice for alleged "price fixing" of apartment rents. DOJ stated RealPage was "attempting to illegally decrease pricing competition between landlords and deprive renters the benefits of that competition." I find it hard to believe that a rental database is "price fixing." What about Zillow, MLS, stock market, Kelly Blue Book...? They all show list and sales prices which people use to set prices for similar goods. An an appraiser I do sales and rental analysis all the time with MLS, CoreLogic, Realty, Google... data. Is that price fixing? People hire me to find out what the market rate sales price or rent is for their home or apartment. Am I a "price fixer?"

RealPage offers a host of software and services to help property managers. One of those services is a software called YieldStar. YieldStar uses rental data from software users and more to suggest list rent prices for apartment building owners. Apartment owners have been using rental data to set prices since the beginning of time. Sometimes the rental prices are public and sometimes you have to do some research to find out the list and sales rent. Back in the day we had to get on the phone and call people. Some do the research and sell the reports. In this case property owners were submitting their own rents anonymously into the database. They don't want to do it publicly because then tenants could see their bottom rent, max rent concessions and only offer to pay rock bottom rent. Car dealerships do the same. Do we even know if they were inputting real rental rates? Doubt it was verified. RealPage said managers only used the data half of the time. Only 10% of some markets use their software. You would need 70% of apartment managers using the data and recommendations to affect the market. Here at most you had 5% considering market rate rent based on the data. They were given market rent data and not an inflated agreed upon value by all apartment building owners. That's the big difference here.

The real issue is rents have risen and it's an election year. Rents correlate directly with home prices which have risen at the same exact rate. The underlying cause is people aren't making enough money to pay the rent because wages are stagnant and there are not enough housing units. They need to help people make more money and build more units. Because it's an election year one party has to instead blame the government's problem on private individuals and businesses. "Vote for me and I'll lower your rent by suing a data company!" Getting rid of RealPage won't lower the rent. They never want to fix the real problem because it's too big and complex.

The last election cycle Joe Biden said blacks and Latinos were being lowballed by "old white racist male" appraisers devaluing their homes. We appraisers were the scapegoat for blacks, Latinos not having as much money as whites and owning less valuable homes. Biden said if elected he'd make sweeping changes with appraisers to increase property values. He didn't change anything but increase government meetings and paperwork. Again the real problem is income. In this situation whites make more than blacks, Latinos. If you make more money you have more money and can afford to buy a more expensive home in a more expensive area. Appraisers report values. We don't set them. Guess what? Whites also own more expensive cars than blacks, Latinos. Are real estate appraisers to blame for that also?

I will try to find the lawsuits and read them closely to see if there was any real "price fixing." The timing right before the election with Kamala Harris talking about high rents and "price gougers" makes me think this is just an election year issue. I'm just glad it's not another made up problem with appraisers. We've been through enough with the false lowball narrative smeared all over the media and internet.

https://www.yahoo.com/news/justice-department-suing-realpage-over-163534773.html

This article goes more into the specifics of the lawsuit. It still doesn't make sense. What about Kelly Blue Book algorithm for car values? They suggest market rate values for cars. It's based on car sales and listings. This is feeling like election year politics. It reminds me of the DOJ, HUD getting involved in a private alleged real estate bias lawsuit in Marin, California. DOJ filed a Statement of Interest in a fake racial discrimination case in appraisal values. It was 100% political so the government can say "see, we're doing something. Vote for us!"

https://natlawreview.com/article/justice-department-sues-software-maker-realpage-enabling-rent-collusion

Below are CoreLogic and Zillow rent reports on a property. Will they and MLS be sued next? I assume the value is being pulled from MLS and Zillow rental database. Apartments.com also shows rental prices for various areas. There are so many rental databases offering suggested rents. Maybe RealPage should have made the rental database non anonymous. It could just be based on general area and not specific building addresses.

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Tuesday, May 28, 2024

Why Appraisal Values May Vary On The Same Property by Mary Cummins Real Estate Appraiser

mary cummins, real estate appraiser, appraiser, appraisal, los angeles, california, value, vary, different, higher, lower, lender, borrower, home, house

Why Do Some Appraisal Values Vary from Others on the Same Property?

Lenders will order an appraisal so a borrower can get a home loan either for purchase or refinance. Sometimes the borrower doesn't receive the loan they want because of credit, rates, terms or appraisal value. If they reapply for a loan, the second appraisal value is sometimes different than the first.

There are many reasons why two appraisals may have different values for the same property. The differences could be due to changes in the market time or the property. In an appreciating market the second appraisal is generally higher because of the passage of time. The second appraisal could also be higher if the home has been improved. It's also possible that more similar homes have sold more recently for a different value than the previous sales used in the previous appraisal. This can be due to the seasonality of the real estate market and other factors. These different values don't automatically mean the first or second appraisal was wrong. Both values could be different and correct. Sometimes of course there are mistakes caused by incompetence.

1. Home Price Appreciation/Depreciation in the Area

A real estate value is a snapshot in time. Recently we've been in an appreciating market. Home prices have risen in value sometimes by 15% or more per year. If you appraise a say $100,000 property in January, it's worth $115,000 by the end of the year if appreciation for that area is 15%. The value didn't go up because you removed all photos from your home. It's appreciation. The same can happen with depreciation when values go down.

Some areas are going through the real estate cycle of revitalization which some call "gentrification." Revitalization happens when people are pushed out of more expensive areas because of affordability into nearby areas which sell for less. This investment in the area and homes causes the area to improve and home prices to rise faster than surrounding areas. Many homes are then fully renovated by the newer owners and sell for much more than unrenovated original older homes. Recently some revitalizing areas have increased in value by 30% per year overall. This could mean an appraisal in December is 30% higher than one in January and both could be accurate market value for that time.

2. Modifications to the Home

Sometimes after people are denied a loan for whatever reason they will improve the home. If you remodel a kitchen, baths, add air conditioning, a pool, a bedroom or add size to the home, the value after the modifications will be higher. If you gut part of your house to remodel it but don't finish, the value could go down. If you just remove personal photos, you won't change the value.

3. Recent Values of Similar Sold Homes

Sometimes some areas have few recent sales or listings of similar properties. People don't want to sell their home because of their low current mortgage rate like today's market. Sometimes there isn't much interest in an area because there is less demand because of issues which negatively affect the value. That could be a new freeway going right next to homes, loss of a major sports team, loss of major business and related jobs... Sometimes unique properties which are larger than the average home, built on a major road, have odd improvements ... will take much longer to sell and rarely sell. Sometimes people prefer to wait for the selling season to sell to get higher prices. This means only mandatory sales of average homes take place such as death of owner, foreclosure or owner is desperate for money. These homes tend to be in fairer condition than most homes so they will sell for less. This drags down value.

Appraisers must use homes which sold within about the last three to six months within about a mile distance from the subject property in the same neighborhood. Appraisers are limited by the highest recent unadjusted sale of similar homes in the neighborhood. While appraisers can use older sold comparables and time adjust, some lenders still limit value to most recent closed comp. If the only homes that have sold recently are all major fixers, have fewer bedrooms, are not upgraded, don't have pools, are not right on the lake with a dock like the subject, this could limit the maximum value. The AMC, Lender set these limits. The appraiser must abides by them or the AMC, reviewer will send the appraisal back and demand comment and changes. In these situations lenders and appraisers suggest waiting for a similar higher priced property to close escrow before reappraising.

Quick example. The only homes that sold in the slow season in November, December, January were fixers in fair condition, no upgrades, no views, no pool and near a busy road. They sold for $100,000. The subject is in great condition, with many new upgrades, view of the ocean, pool and on a private cul-de-sac. It's clearly worth more than the recently sold total fixers maybe $150,000. Some lenders may limit the maximum valuation to the maximum sales price of similar sized homes recently sold in the same neighborhood, $100,000. If the borrower waits to refinance until April, May, June, there will probably be similar upgraded homes sold because more homes sell at this time of year. The value could be $150,000 based on sales in the $150,000 range.

This brings us to the seasonality of real estate sales. Sometimes there are more homes sales during certain times of the year. Spring and early summer have more home sales as people prefer to sell, buy, move after school lets out before summer vacation. Sales volume is also related to weather. There are fewer sales in the winter where it snows or during heavy storms. Seasonality varies by area. This can cause there to be few similar sales during certain months of the year. The slowest months volume wise are November, December and January. The busiest are April, May and June. If you appraise your home for a refinance in November, there will probably be fewer sales to use as comps. It's also possible there are a higher percentage of stress sales during the slower months. Many stress sales are in fairer condition especially foreclosure and estate sales so they may sell for less which can negatively affect value. This article states seasonality can cause a 10% difference in price, value. There is more demand and buyers bidding against each other during the busy season which drives up prices. Some advise buying in the winter and selling in the summer for this reason. Besides seasonal cycles there are other cycles which affect sales volume and price such as economic cycles, interest rates, Covid pandemic, war, politics... This is reflected in the market by sales prices. The appraiser does not consider these things in the final valuation.

For this reason it's generally a good idea to see what similar homes have recently actually sold for in your area before applying for a loan to see if it makes sense. You will get a better rate, terms the lower the loan to value ratio so a borrower wants a higher appraisal value. While we include listed properties in the appraisal, sold properties are what matter. We generally search homes +/-15% difference in size per square foot, similar bed/bath count, similar amenities/upgrades/condition, within a mile distance from subject which sold within last three to six months. We then choose the most similar recent comparables. Lenders generally require three closed sales within three months. Those sales will limit the upper level of value.

4. Incompetence

Appraising homes can be a difficult complex process especially with unique homes in changing areas and markets. Many lenders use robot Automated Valuation Methods (AVMs) for cookie cutter homes. Cookie cutter homes are newer median priced average sized homes in average condition in a homogeneous area. If your home is older, larger than average for area, improved above/below most homes in the area, has a view, issues or is on the edge of two different areas, you will need a full appraisal.

The appraiser must choose similar comps in the same neighborhood in order to get an accurate value. Sometimes there are no recent similar comps. The appraiser will have to use older similar comps instead of expanding the comp search into a totally different area. Those comps will have to be accurately adjusted for time and other differences. If the appraiser does not select similar comps, the resultant value will be inaccurate. That would be incompetence. Appropriate comp selection is vital.

One example of this is a case in Marin, California. The first appraisal was $989,000 February 2020. The second appraisal was $1,482,500 March 2020. The subject was larger than average for the area built with telephone poles on a very steep lot near reclaimed swamp land. There were few recent local sales because there was little demand in the area. The first appraiser used local sales. The second appraiser widened the search into an area with larger high quality homes that sell for almost twice as much in Mill Valley.

The homeowners sued the first appraiser for "racial discrimination" just because they didn't like the first appraiser's lower value. The borrower wants a higher value because the higher the value, the better the terms and lower the rate. The first appraiser didn't do anything racist or discriminatory. The first value was similar to the robot values like Corelogic, RedFn... Robots can't be racist or discriminate. The second appraisal was actually the wrong value because they used the wrong comps. Borrowers never sue when the appraisal value is high even when it's wrong. If it's lower than what they'd like, they automatically assume bias or incompetence. Clearly it was the second appraiser who was biased and incompetent. Some appraisers fear complaints and want to please the lender, borrower so they tend to appraise on the higher side. I'd bet most appraisers over appraise than under. There is no motivation for an appraiser to appraise lower than market value. They have nothing to gain and everything to lose.

Here is one example which incorporates some of the factors which may cause two appraisals to be different.

Appraisal One: Home appraised January 1 in area where it snows. It's in good condition, upgraded with two garages and a view. Home sales volume is low. The only recent sales were fixers with no garages or views selling for $100,000. Appraiser uses some old similar sales and time adjusts. Home appraises for $100,000. Appraiser notes that subject is in better condition with garages and a view. Appraiser explains the current market and lack of similar sales. Many appraisers would state home would appraise for more when/if similar homes close escrow. Appraisers generally state their limitations which can be the highest closed recent sale.

Appraisal Two: Home appraised June 1 when the weather is 75 degrees. Owner has since added a second bathroom. There are now some similar sales in the same condition with the same view. A new sports arena just announced it will break ground bringing a lot of new business and jobs to the area. The area has appreciated by 10% in six months for this reason. The home is now slightly larger and worth more. Similar homes now sell for $150,000. Home appraises for $150,000. The value of second appraisal is 50% higher than first. The first appraiser was not incompetent. Both appraisals were correct at the time they were made. This is why one must carefully read appraisal reports and consider all the factors that affect value.

Different appraisals done at different times can have different values and still be correct. There are many legitimate reasons for appraisals to vary in value by even 30% in a quickly changing market. It's natural for people to be psychologically attached to their home and assume it's the best in the area when that may not be true. Some homeowners receive agent postcards in the mail or see Zillow ads listing the highest sold and listed homes in their area. Agents, Zillow do this to attract sellers with potential high prices so they can get a listing and make money. Some borrowers assume their home which is in inferior condition and location is worth the same amount as those high priced listings when it's not. These false expectations cause people to feel they've been low-balled, cheated or discriminated against when they necessarily haven't. People who have been discriminated against for their entire life are more likely to assume discrimination. It's important to know your home and try to understand local value unbiasedly. It's also important to understand appraisal value when reading an appraisal report of your home.

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Friday, May 24, 2024

False Bias Claims Against Appraisers - Seven Main Cases in the Media by Mary Cummins Real Estate Appraiser

mary cummins, real estate appraiser, real estate appraisal, los angeles, california, bias, discrimination,race, racial, white, black, latino, andre perry, hud, george floyd, lowball, lowball,

UPDATE: Some of these cases have now gone through the court and review system. The results of the cases prove these were false and malicious alleged discrimination cases. Click the individual cases below to see the final outcomes.

Appraiser found not guilty of racial discrimination in Maryland case. The second higher appraisal was in the wrong. Court ruled the lower appraiser did not discriminate.

Second higher appraisal in the Indiana case was wrong per HUD. They still need to fully vindicate the two lower appraisers.

ORIGINAL: Below are six of the main falsely alleged racial bias cases against real estate appraisers. When I heard about the first case I assumed the appraiser maybe was racist or was incompetent. Who would make such a hurtful false claim if it weren't true? I would have been the first to take the appraiser out behind the proverbial woodshed for a talking to.

After fully researching the properties and values, I realized the claims were false. I continue to research new cases and have not found one yet where the lower appraiser was in the wrong. I definitely found no biased or racist behavior on the part of the lower appraisals. I have found that the second or higher appraiser has been in the wrong either through bias or incompetence. If I knew who they were and had a copy of the report, I would report them.

In these cases the borrowers truly believed that they had been discriminated against. I understand after a lifetime of discrimination one could assume anything they don't like is the result of discrimination. Sometimes though there is a perfectly good explanation for something we don't like that has nothing to do with race, color, gender...

I did notice four similar things with all of these cases. One, the homes all have complex physical issues. Two, the homes are all located on the edge of neighborhoods nearer to higher valued areas. Three, property values were rising quickly. Four, some of the homes had external factors which greatly affected value. These four factors make for a complex appraisal assignment. If the correct comps are not chosen, evaluated, adjusted properly, values could vary by a large amount. The end result could be incompetence in the form of a higher appraisal.

The first issue has to do with complex physical characteristics of the subject property. Something that I noticed with all of these cases is that they're not newer homogeneous tract homes. All of these homes are complex. The homes are complex because some are much older, in C4-C6 (fair) condition, have unpermitted additions, illegal bedrooms/bathrooms, are on severe slopes, were built to Q5-Q6 quality (low), built on reclaimed swamp land, have varying views... The difference in value could be attributed to differences in actual legal size, real bed/bath count, view, condition or upgrades compared to other homes which sold for more.

The second issue has to do with the homes being located nearer to the boundary of two dissimilar neighborhoods. This caused the second higher appraiser to choose non-comparable comps in a totally different neighborhood than the subject. The Marin case is a prime example of this. There were few larger recent sales in the same area because most homes are smaller and there were few sales overall. The higher appraiser chose comps in Mill Valley which has more larger homes which sell for twice as much as Marin. They are not comparable areas to say the least. It's like comparing homes in South Los Angeles to Beverly Hills.

The third issue is quickly appreciating values. All of these cases happened when homes were appreciating over 15% per year. If you appraise a $100,000 home January 1 for $100,000 then appraise it again 12/31 of same year, the value would be $115,000. That doesn't mean the first appraiser low-balled $15,000. Both appraisals are correct. Sometimes the area was also revitalizing (some call it gentrification) so values went up 25-30% per year. Revitalizing happens when people are pushed out of more expensive areas into nearby less expensive areas causing the area to improve and property values to rise.

The fourth issue is external factors which greatly affect value such as location on a busy highway (Maryland case). Homes located on busy highways are worth less than homes located on cul-de-sacs, private lanes, small residential streets and streets with no through traffic. Another example is homes built on reclaimed swamp land on unbuildable sloped inclines (Marin case). Yet another example is homes a mile from the ocean near the freeway being compared to homes on the ocean with a full ocean view and a boat dock (Florida case).

There is another issue which contributed greatly to these false complaints which is not related to the actual appraisals or homes. It is Andre Perry's false, fabricated, misleading paper and book titled "Know Your Price." Andre Perry falsely stated that racist real estate appraisers lowball black people's homes by $46,000 per home just because appraisers are all "white male racists." Appraisers weren't even involved in the data used by Perry. The truth is people who make more money have more money and buy more expensive homes in more expensive areas. They also buy more expensive cars, clothes, jewelry... Whites make more than blacks and Latinos. Most of that racial wealth gap is actually reflected in higher earners. No homes were low-balled in Perry's data. People read articles about the paper and assumed it was true. Politicians even used the faked paper to campaign to black people for votes and campaign donations.

In all of these huge false appraisal bias cases in the media we had a borrower who automatically assumed racism, a home with intrinsic, extrinsic negative value issues located in a revitalizing appreciating area near a neighborhood which is worth much more. All of these factors combined contributed to a huge explosion of misdirected hate against appraisers especially after George Floyd's murder and Andre Perry's fake paper. It will take years to deal with the false narrative of the alleged "racist old white male" appraiser. The media is directly complicit for wanting to sell advertising to make money by inciting racial divide and hatred with their misleading stories. I didn't see one article where they had an appraiser review the appraisals or give their opinion of the cases. I contacted the writers and no reply. Shame on the media for promoting false hateful racist stories.

20 Pacheco, Marin, California - Tenisha Tate, Paul Austin
Defendant settled because their insurance company didn't want to go to trial. Case never went to trial. Had they gone to trial appraiser would have won.

https://mary--cummins.blogspot.com/2021/02/alleged-discrimination-home-appraisal.html

1329 Fall Creek Pkwy E Dr, Indianapolis, Indiana - Carlette Duffy
HUD rules the higher appraisal was wrong. Appraiser that was sued valued it properly.

https://mary--cummins.blogspot.com/2021/05/homeowner-claims-discrimination-in-home.html

4132 Sherwood, Jacksonville, Florida - Abena Sanders Horton, Richard Horton

https://mary--cummins.blogspot.com/2020/08/black-homeowner-claims-discrimination.html

5924 Martin Luther King, Oakland, California - Cora Robinson

https://mary--cummins.blogspot.com/2021/07/racial-discrimination-alleged-by-cora.html

Allendale, Oakland, California

https://mary--cummins.blogspot.com/2024/06/details-about-alleged-racial-bias-case.html

209 Churchwardens Rd, Baltimore, Maryland 21212 - Nathan Connolly, Shani Mott
Court rules appraiser did not discriminate

https://mary--cummins.blogspot.com/2023/01/maryland-lawsuit-alleged-racial.html

Carlos Turner et al v. Henley Appraisals, Ohio. Court ruled appraiser did not discriminate

https://mary--cummins.blogspot.com/2025/06/false-racial-discrimination-case.html

DISCLAIMER: https://mary--cummins.blogspot.com/p/disclaimer-privacy-policy-for-blogs-by.html

Mary Cummins

Friday, April 12, 2024

Bias Against Real Estate Appraisers by Mary Cummins

appraisal bias, cindy chance, ceo appraisal institute, mary cummins, real estate appraiser, real estate appraisal, confirmation bias, loss aversion, anchoring bias,

Interesting letter from Cindy Chance CEO of the Appraisal Institute. Basically people who automatically claim appraiser bias are they themselves biased. This is why the false narrative of the "racist white male appraiser" has gained so much traction in the media and with the public. It's gotten to the point that the government made up a fake solution to the fake appraisal bias problem to satisfy the public and garner votes for the upcoming election i.e. PAVE report. What we appraisers actually do is unbiased. We rely on data, numbers and facts only. Appraising is a math formula.

When I see some lay people claim appraiser bias I feel that they believe this 100% even though AEI's research based on government data proved this is not true. Racism and bias definitely exist. Sadly blacks, Latinos and others have been and continue to be discriminated against in our country. It appears to be human nature or confirmation bias to assume that past biased behavior will always be repeated. I took the mandatory class on bias for my license. People will automatically assume anything they don't like MUST BE the result of racism, discrimination and bias. They will falsely assume any phrase must be code for a discriminating term like "Marin City" in the Marin case. They assumed it was code for "black area." It was just the name of the subject's city. Here's another. "Security bars must be removed from bedroom windows" must be code for "black area." No, it's California building and safety law because people can burn to death in a fire.

I've seen this in many areas besides appraisals. A black woman said a white man told her to smile. She claimed he was racist wanting her to smile like old black minstrels to entertain him. I told her that all men tell all women to smile. I've been told the same in the past and my skin is white. It's not about racism but control, harassment, flirting... Because the woman was black she automatically assumed it was only because she was black.

Now that we know that the public is biased against real estate appraisers what do we do about it? Hopefully the next parts of this letter will answer those questions. We know Automated Valuation Methods AVMs are not the answer. They are more biased than human appraisers because they don't have all the information needed to do a full valuation. They don't know condition, upgrades, lot type, view, specific location in a neighborhood or if the home even exists. Zillow doesn't even use nearby comps if there are no recent ones of a similar size. They'll go two miles away into a neighborhood worth twice as much to find recent, similar sized homes. I have my own suggestions that may help a little.

Write your appraisal report knowing biased lay people will be reading and sharing it publicly. Don't use abbreviations or subjective terms. Explain everything in clear simple language at a fifth grade reading level like most newspapers. Show your math. Include your regression charts if necessary. This is especially important if the subject doesn't conform to the median home in the area. I've noticed most of the big media cases of alleged appraiser bias were nonconforming homes with major issues on the edge of two very different neighborhoods. Of course they wanted their home to be worth as much as the larger, upgraded homes with views in a different neighborhood that sells for twice as much even though they initially bought it at a huge discount.

If you are given comps and they are not comparable, mention all of them in your report. They'll end up in a Reconsideration of Value ROV anyway. Specifically state why they are not comparable. State why they are worth more than subject, i.e. larger, fully remodeled, full ocean view, cul-de-sac, different neighborhood...

If anyone has any suggestions on how to counter bias against appraisers and their reports, please, leave a comment. This is a huge problem that affects us all.

"From Cindy's Desk

I’ve heard from many appraisers, particularly residential appraisers, that the Appraisal Institute should have done better at standing up for them by making the public aware of their skills and professional discipline. I agree. Sweeping, sensationalized claims of “bias” about our profession ignore appraisers’ core skills, ethical standards and professional disciplines. The valuer is the only party to a real estate transaction without a financial interest in its outcome; moreover, the appraiser’s duty is to uphold the public trust, by providing an unbiased, impartial opinion of value based on a rigorous process that is continually refined and improved by the profession. Appraisers are heavily regulated to ensure quality standards, held to a rigorous ethical professional code of conduct, and our SRA and MAI designations reflect the profession’s highest standards. Why then has it been difficult for appraisers to respond effectively as a profession to unfair accusations of bias?

One reason is that claims of bias are antithetical to what appraisers do. (In case you’re interested, philosophers and linguists call this a “failure of presupposition,” and it is hard to address because it assumes something that is not actually the case.) As of now, the public is hearing from the media and politicians about a certain terrible kind of bias. What they need to know is that professional real estate appraisal has long been built on eliminating all kinds of irrational bias. Appraisers, ironically, have been ahead of the curve in working continuously to identify and eliminate every kind of bias from their professional analysis.

Thanks to Daniel Kahneman, who died recently at the age of 90, and his partner Amos Tversky, the scientific community has recognized for over half a century that there is a normal human tendency toward bias, which they termed “cognitive bias.” Their research showed that cognitive bias is part of the way all our brains work normally. In fact, our survival depends upon it.

These Nobel Prize winners (followed by several more in the following decades) demonstrated that our rationality is a myth and bias is the norm, and it has been a good thing for humans, evolutionarily speaking, because bias allows us to not have to think too much in cases where a quick judgment increases our odds of survival. Roughly defined as “any predictable error that inclines your judgment in a particular direction,” bias is a natural feature of the way humans think.

It’s easy to recognize some of our most common biases that reflect what is “normal.” We are naturally more averse (two times more!) to negative consequences than we are attracted to positive consequences. This is called “loss aversion,” which helps explain why we don’t like to change, even when things are going poorly. Being twice as likely to avoid downside as to pursue upside helped kept us away from poison plants and cliff edges, but it also often keeps us from pursuing the best courses of action. There are many, many such examples of normal (not good, but normal and understandable) cognitive bias, including “anchoring bias,” the tendency to rely too heavily on the first piece of information one receives, “availability heuristic,” our tendency to overestimate the importance of information we remember easily, and “confirmation bias,” the tendency to focus on information that confirms our pre-existing hypothesis.

Cognitive bias is powerful and can only be managed through the application of methodologies and procedures that require disciplined analysis of data and information (sound familiar, appraisers?). In fact, cognitive bias is why we depend on professionals trained to be unbiased specifically where our proneness to irrationality could create serious problems, such as science, finance, and economics. Appraisers’ impartial analysis protects the public from our hard-wired, everyday biases that would undermine the healthy function of the real estate industry.

Appraisers are essential to a healthy economy because there are all kinds of opportunities for cognitive bias to infect real property valuation; real estate is a context ripe for “loss aversion,” “anchoring bias,” ”availability bias,” “conformity bias” or “conflict avoidance,” to name a few. Appraisers are trained not to fall into these irrationality traps. Appraisers are continually trained to adjust their opinions of value based on data and professional discipline, precisely to avoid cognitive biases to which homeowners, loan officers, and all of us are susceptible. And in case you think machine learning and AI will save us, it is worth noting that AVMs and AI-generated results are not more rational; on the contrary, machines proliferate biases reliably, that is, unless there are educated appraisers who are regularly producing inputs to correct them.

In reality, appraisers have a great story to tell, but we have a long way to go to refocus the terribly flawed “appraiser bias” narrative onto facts and science. With facts, fairness and science all on our side, and with your help, my team and I have committed to advocacy and communications built on each member’s commitment to doing the right thing, the right way.

There’s more to say about bias. That’s why this is part 1 of a 3-part series on bias…next up…the normal biases of homeowners and loan officers, “noise” and bias, cultural bias, the GSEs, and “banned words”…

Cindy Chance, CEO of the Appraisal Institute"

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Mary Cummins


Sign on back of Aztec sun calendar stone. Text: "Gobierno del Estado de Mexico. EDOMEX Decisiones Firmes. Resultadors Fuertes. Siendo, Gobernador Constitucional del Estado de Mexico. El Lic. Alfredo del Mazo Maza, se entrego el calendario Azteca o piedra del Sol, Replica elaborada a mano por artesanos de Chimalhuacan, Estado de Mexico, para la Plaza Mexico en Lynwood, California, EUA. Diciembre de 2018." Translated:			Government of the State of Mexico. EDOMEX Firm Decisions. Strong Results. As Constitutional Governor of the State of Mexico, Mr. Alfredo del Mazo Maza, presented the Aztec calendar or Sun Stone, a replica handcrafted by artisans from Chimalhuacan, State of Mexico, for the Plaza Mexico in Lynwood, California, USA. December 2018.

Mary Cummins, Real Estate Appraiser, Animal Advocates, Los Angeles, California

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