- Properties in black and Hispanic neighborhoods were consistently underestimated.
- Official numbers show that 92.4% of house appraisers are white.
- The couple chose to refinance their mortgage in 2020 when interest rates were historically low.
A black couple in the United States has settled a lawsuit with a real estate appraiser who they accused of undervaluing their home because of their race.
Tenisha Tate-Austin and Paul Austin’s home was assessed at over $1 million (£845,000) in 2020, far less than projected.
They requested another appraisal, this time with a white acquaintance posing as the owner of the California home. It was worth approximately $1.5 million.
Official numbers show that 92.4% of house appraisers are white.
In 2021, the Federal Home Loan Mortgage Corporation disclosed the results of a five-year study of 12 million evaluations, which revealed that properties in black and Hispanic neighborhoods were consistently underestimated.
Ms. Tate-Austin and Mr. Austin purchased the house in the San Francisco suburb of Marin City in 2016 for around $550,000.
The city has a substantial African-American population (38%), contrasting to the largely white Marin County, where it is located, which has only 2.8%, black residents.
The couple chose to refinance their mortgage in 2020 when interest rates were historically low.
The previous year, a company valued their four-bedroom property for $1,450,000 after making significant upgrades, including expanding square footage.
But, when they tried to refinance in 2020 to take advantage of low-interest rates, they were appraised at only $995,000.
So they devised an experiment. What if their white acquaintance posed as the homeowner instead?
They cleaned up after themselves, including their African-themed artwork and photographs.
The practice is known as “white-washing,” and black homeowners around the country have reported using it to sell their homes.
A separate appraiser inspected the house for the fake white homeowner several weeks after their first estimate.
This time, it was appraised at $1,482,500 – almost half a million dollars more than the initial estimate, according to the lawsuit.
“You feel a sense of relief like, ‘I told you.’ Then you just feel a sense of sadness.”
“We had to do what we had to do in order to have our house appraised for what it should have been appraised for from the start.
“I mean, it’s the financial impact, but it’s the emotional impact. It’s the feeling every day like, the tax of being African-American in this country like you don’t know, it’s a coin toss.”
The couple filed a lawsuit against the first appraisal firm for breaching the Fair Housing Act, a federal law.
On Wednesday, the lawsuit was resolved for an unknown sum.
The defendants are not required to admit any liability in the case as part of the deal, but they must view a documentary about discriminatory real estate and attend a training session on the history of racial discrimination in real estate.
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