African-American couple settled lawsuit over 'white-washed' home valuation

A black couple in the United States has reached a settlement with a real estate appraiser whom they claimed undervalued their home due to their race. 

In 2020, Tenisha Tate-Austin and Paul Austin's home was appraised at nearly $1 million (£845,000) , which is significantly less than what they had anticipated. They requested a second appraisal, this time with a white friend posing as the California property's owner. It was valued at almost $1.5 million.

According to official statistics, 92.4% of home appraisers are white. In 2021, the Federal Home Loan Mortgage Corporation published a study of 12 million appraisals that were conducted over five years, which revealed that homes in black and Hispanic communities were routinely undervalued.

Ms. Tate-Austin and Mr. Austin purchased a home in the San Francisco suburb of Marin City in 2016 for approximately $550,000. In comparison to the predominantly white Marin County, where it is located, where only 2.8% of the population is black, the city has a large African-American population (38%). The couple then decided to refinance their mortgage in 2020, when interest rates were historically low.

A company had appraised their four-bedroom home for $1,450,000 the year prior, after they had made significant improvements, including adding square footage. When they decided to refinance in 2020 to take advantage of low interest rates, however, they were appraised for only $995,000. Therefore, they devised an experiment. What would happen if their white female friend pretended to be the homeowner?

They removed all traces of themselves, this included their African-themed artwork and photographs, from their home. The process is referred to as "white-washing," and black homeowners across the nation have reported using it to sell their homes.

Several weeks after the initial appraisal, a different appraiser toured the residence for the white impostor. According to the lawsuit, the property was re-evaluated at $1,482,500, nearly a half-million dollars more than the initial estimate.

Ms. Tate-Austin told sources, "You feel a sense of relief like, 'I told you.' Then you just feel a sense of sorrow." They said they did what they had to do and what was necessary to have their home appraised for what it should have been appraised to from the beginning.

According to them it was not just the financial impact but also the emotional impact. It was the feeling every single day that the tax of being an African-American in the country was a coin toss as if they did not know. 

The couple filed a lawsuit against the first appraisal company for violating the federal Fair Housing Act, which prohibits housing discrimination. Wednesday saw the settlement of the lawsuit for an undisclosed amount.

The defendants do not have to admit any liability in the case as it is a part of the agreement. However, they will be required to attend a training session on history or racial discrimination in real estate and will also have to watch a documentary about discriminatory real estate.