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75 will be driving by the property to make some type of an assessment. However, appraisers need to be aware that this could expose them to certain biases, even though there is no chance they've come into contact with the inside of the property, much less the borrower and therefore could have demonstrated bias, right? Despite the arms-length nature of the foreclosure appraisal, it should not be considered at zero risk of a biased transaction, unconscious or not. e key is to stick to the facts and avoid factors that may lead them down a path into a potentially sticky situation. One example is focusing on the racial makeup of a neighborhood. is should not be considered as a factor in developing your professional opinions. Most appraisers will know this, they are trained on this, but it's always a good reminder that it should not be a consideration. Ultimately when it comes to foreclosures, or really any situation, appraisers need to always be mindful that they are charged with providing useful data and reliable and accurate results. It's not just the number that you're providing; you are in charge of data collection, providing conclusions that are appraisal-related, and providing useful information to the client to base a decision. As the market shifts and pivots, appraisers need to stay on top of things to see what is happening with prices and what's happening with values. Right now, we are coming out of a very overheated market. In some places, things are still overheated because of that lack of inventory and because of deflated interest rates that have driven up demand for refinances. is dynamic has had some impact on affordability, part of the metrics analyzed by appraisers when deriving conclusions. Here are some questions to consider: What is the level of inventory? What is the pace of sales activity? When will buying activity in a particular market burn through inventory? All of these points must be considered when correctly valuing any asset, particularly distressed assets. Other important considerations: available distressed inventory, sources of purchase financing, and the occurrence of all-cash purchases. As the appraiser, you have to read the market very, very carefully. In conclusion, the prognosis for the market, in general, is moving towards more stabilization. While foreclosure activity is anticipated, it is not anticipated to be disruptive to the marketplace in the near term. Whether appraising to support the purchase or refinance transaction, or loan default activity, the appraiser is required to complete assignments without bias and a level of professional competency showing an understanding of market forces and influences. Ken Dicks is a professional appraiser and Director of Appraisal Compliance & Initiatives for Reggora, a firm that provides appraisal management technology for lenders and appraisers.