When you think of certain neighborhoods in the Sacramento area, what comes to mind when hearing about Oak Park, The Fab 40s, Empire Ranch, Del Paso Heights or Granite Bay? In laymen’s terms some might categorize particular areas as desirable or undesirable, rich or poor, or ultimately good or bad. But descriptions like this will quickly send appraisers to Fannie Mae’s naughty list.
Fannie Mae frowns upon the following language (taken verbatim from the Fannie Mae Selling Guide 3/31/11 Part B, Subpart 4, Chapter 1).
Unacceptable terminology for appraisal reports includes:
– pride of ownership, no pride of ownership, lack of pride of ownership
– poor neighborhood
– good neighborhood
– crime-ridden area
– desirable neighborhood or location
– undesirable neighborhood or location
– other subjective terminology that can result in erroneous conclusions is equally unacceptable
Fannie Mae is determined to ensure appraisers stay objective about the criteria they use to describe and value property. Appraisers need to not let their personal opinions, beliefs or subjective judgements about certain neighborhoods influence the content or outcome of an appraisal. In addition to the above terminology, appraisal forms designed by Fannie Mae state on the first page that “race and racial composition are not appraisal factors.”
For the record, it’s my true joy to serve clients on all ends of the economic and social spectrum – and to show respect and dignity no matter what neighborhood I am working in on any given day. This is exactly why I remove my shoes when entering all houses no matter what the zip code (well, unless the carpet is filthy of course).
Question: What do you think of Fannie Mae’s “naughty list” of words? If you are a real estate agent, I’d be curious to hear your take too.