Highlights Urgent Need for Alternatives to Traditional Appraisals as Racial Bias Remains Prevalent
Finds that Approximately 85% Of All U.S. Properties Can Be Approved for AVM Or Evaluation Use In Lieu Of Traditional Appraisals
HouseCanary, Inc. (“HouseCanary"), a national brokerage known for its real estate valuation technology and accuracy, today released the results of a whitepaper entitled “Standards for Automated Property Valuation,” which outlines the requirements and data-driven benchmarks to mitigate risk and bias when replacing traditional appraisals with automated solutions. The full study can be viewed here.
As a follow up to its December 2021 study, “Reducing Racial Bias in Home Appraisals Using Automated Valuation Technology,” HouseCanary’s latest whitepaper proposes a set of recommendations for policy makers and AVM providers around industry-wide standards and appropriate uses for an underwriting grade solution, as well as requirements for accuracy and fairness testing that exceed the standards presented in 12 U.S.C. § 3354.
Jeremy Sicklick, Co-Founder and Chief Executive Officer, commented: “With consistent evidence of racial bias in traditional appraisals, it has become clear that an alternative solution is sorely needed. The requirements we have outlined are focused on ensuring safety and soundness in the system, and provide a set of measurable, fact-based rules through which use of an automated solution in lieu of a traditional appraisal results in no additional risks. These rules create a basis for broad use of automated solutions for lenders in qualifying cases based solely on quantitatively-derived criteria.”
By releasing its recommendations, HouseCanary, which has developed industry-leading valuation technology, aims to reduce the burden on each individual depository institution. As a result, the recommendations will diminish duplicative work, and propose a centralized solution, where AVM and Evaluation providers can be certified for use with respect to certain properties and/or transactions.
The summary of recommendations and standards from the whitepaper can be reviewed here.
About HouseCanary
Founded in 2013, national real estate brokerage HouseCanary empowers consumers, financial institutions, investors, and mortgage lenders, with industry-leading services including valuations, forecasts, and transaction support. These clients trust HouseCanary to fuel acquisition, underwriting, portfolio management, and more. Learn more at www.housecanary.com.
If you are currently working with a real estate agent, this is not meant as a solicitation of your business.
HouseCanary, Inc. is a Licensed Real Estate Brokerage in KS, NM, SC and under the Trade Name ComeHome in AL, AK, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KY, LA, MA, MD, ME, MO, MN, MS, MT, NC, ND, NE, NH, NJ, NV, NY, OH, OK, OR, PA, RI, SD, TN, TX, VA, VT, WA, WI, WV, WY.
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AVM Disclosure: An AVM is an estimated sale price for a property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice.
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Contacts
Longacre Square Partners
Casie Connolly / Ashley Areopagita
housecanary@longacresquare.com
