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Bias in an appraisal?! You may not realize it. There is the possibility of bias in your appraisal and your appraisal report. How so? An appraiser is competent, independent, impartial, and objective. OK, so what’s the problem with bias? According to the experts, there are at least 180 types of bias. We appraisers can engage in may of them. How can bias hurt us? Well, are we independent of outside influences on value? How impartial are we? Are we objective in all aspects of an appraisal? What happens when a state appraisal board levels charges of bias against an appraiser? Appraisers cannot be advocates. Advocates are supposed to be biased – toward the interests of their clients. We appraisers do not share this responsibility. Instead, we have a responsibility to be disinterested. To remain above the fray. To tell our clients the truth, even what that truth hurts.
So, is there bias in an appraisal? Two of the most common biases are selection bias and confirmation bias. There is an explanation of both of these in this podcast. There are other biases to be sure. But these two are a start. As with so much of what we do, the presence or absence of bias is up to the appraiser. Consult The Cognitive Bias Codex. Learn which biases are common in real estate appraisals. Then, work to overcome them! Your appraisal business’s future could depend on it. Questions on bias, USPAP, or anything else appraisal related? Contact me at tim@theappraisersadvocate.com. Thanks! Be safe and well!