States Now Requiring Appraisal Bias Training

States Now Requiring Appraisal Bias Training

As a real estate appraiser, you know that independent, objective home appraisals and valuations are a crucial part of the homebuying and lending processes. Anti-bias training courses are designed to help eliminate unintended bias in home valuations. Several states already have anti-bias education requirements in place, and others may soon follow. Whether your state currently mandates appraisal bias training or not, McKissock has you covered. We offer the courses you need to educate yourself and meet your state’s licensing requirements.

Ensure compliance with fair housing regulations by taking our CE course, Fair Housing, Bias, and Discrimination.

Understanding bias in the appraisal process

What is appraisal bias?

The Uniform Standards of Professional Appraisal Practice (USPAP) defines bias as a preference or inclination that precludes an appraiser’s impartiality, independence, or objectivity in an appraisal.

Unconscious bias in valuation

Merriam-Webster defines unbiased as free from all prejudice and favoritism. While we usually recognize conscious bias and can keep it under control, unconscious bias refers to thoughts and behaviors that we are unaware of and how they influence our day-to-day decisions. Neither appraisers nor other professionals are immune to unconscious bias. It can affect how we interact with clients, homeowners, and peers. Unconscious bias in valuation may unintentionally affect our appraisal process and how we form an opinion of value.

How to combat unconscious bias

As an appraiser, you must give an unbiased opinion of value. Actions you can take to avoid unconscious bias and prevent unintended discrimination in the appraisal process may include educating yourself on these issues, avoiding use of subjective terminology, carefully complying with USPAP and Fair Housing laws, and, in general, completing all appraisal assignments with objectivity and impartiality.

A good place to start is by learning to recognize the various biases that influence appraisals and the steps that you can take to reduce said biases. You can learn to mitigate the impacts of valuation bias by taking our course, Fair Housing, Bias, and Discrimination. In this 4-hour continuing education course, you’ll be introduced to issues related to fair housing, fair lending, bias, and discrimination. Additionally, this course explores different types of bias and provides examples of how they might affect appraisals.

The rise of mandatory training

The Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) issued the PAVE Action Plan in March 2022. One of the key initiatives of the Action Plan is to “Cultivate an appraiser profession that is well-trained and looks like the communities it serves.” The plan lays out several actions to remove barriers to the profession and “to strengthen anti-bias, fair housing, and fair lending training of existing appraisers.”

Either in response to the PAVE Action Plan or for other reasons, many states’ regulatory boards have been making changes to their training requirements for appraisers in recent years.

States currently implementing mandatory appraisal bias training requirements include:

We will continue to update this list as more states implement similar requirements and additional course offerings become available. Stay tuned!

Examining appraisal bias training curriculum

The core components of effective valuation bias training are fair housing, fair lending, anti-bias, and anti-discrimination training. Some states (e.g., California) also require cultural competency training. The curriculum of a high-quality training course might include the following:

  • A review of federal fair housing and fair lending laws and regulations
  • A review of the fair housing complaint process and HUD and DOJ enforcement
  • An in-depth examination of the concept of bias
  • Examples of the different types of bias that may occur in real property valuations, including implicit (unconscious) bias
  • Actions that an appraiser can take to avoid bias in appraisal development and reporting
  • A review of the current edition of the Uniform Standards of Professional Appraisal Practice (USPAP) for guidance relating to bias and discrimination
  • An overview of the ongoing struggle for fairness and equity in housing

When selecting a training program, it’s important to ensure that the bias training curriculum satisfies the requirements (if any) specified by your state.

For example, the state of California passed Assembly Bill 948 in September 2021. As of January 1, 2023, California real estate appraisers applying for their initial license must complete at least one hour of Cultural Competency education. Appraisers applying for license renewal in California must complete at least one hour of Cultural Competency and two hours of Elimination of Bias, which can be combined into a three-hour training course.

Implications for appraisers and the profession

Valuation bias training is key to enhancing professionalism and ethical standards in the appraisal profession. Training programs are designed to help protect not only homebuyers and mortgage borrowers, but also real property appraisers. Appraisers will benefit by gaining valuable knowledge and tools to mitigate legal risks, ensure regulatory compliance, and avoid violations and complaints.

Accessing training courses

McKissock Learning is your trusted source for appraisal licensing, continuing education, and anti-bias training. For over 30 years, McKissock has partnered with appraisers from around the country to bring you the highest quality courses taught by experts.

We offer a state-specific appraisal bias training course in California and state-specific fair housing courses in New York (mandatory) and Ohio (elective). We also have an excellent CE course titled Fair Housing, Bias, and Discrimination, which fulfills mandatory requirements in some states (e.g., Minnesota and Virginia) and is offered as an elective in others.

Remember, the best way to avoid appraisal bias is to embody the three operative words that define an appraiser—independence, impartiality, and objectivity. Even if your state does not yet require appraisal bias training, you can take proactive steps toward fair valuations by signing up for McKissock’s anti-bias courses.

Like this article? Check out Say This, Not That: Words and Phrases to Replace in Your Appraisal Reports next.

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