Black couple’s home valued at $500K more when white buddy poses as owner: settlement

A black couple has settled a lawsuit with a real estate appraiser that undervalued their California home by nearly half a million dollars.

Paul Austin and Tenisha Tate Austin’s four-bedroom residence in posh Sausalito, just outside San Francisco, has been valued at $998,000 by Janette Miller, co-owner of Miller and Perotti Real Estate Appraisers. That figure was $455,000 lower than the estimate made for the previous mortgage refinance in 2019.

Feeling that their house was worth a lot more money, the Austins asked one of their white buddies to impersonate the owner of their house. They revalued the house and suddenly it was worth $1.48 million.

The Austins decided to sue Miller and her company, arguing that her score was “a direct product of racial discrimination.”

The case was settled out of court and Miller agreed to pay the couple an undisclosed amount of money. The settlement also includes an unusual twist: The appraiser also had to watch Our America: Low Score, a documentary about their “bleached out” saga.

“Having to experience everything that came with getting a low rating was overwhelming,” Paul Austin, 47, said in a statement. “Being able to tell our story and knowing we have legal help has helped.”

Tenish’s wife, 43, added: “The constant undervaluation of homes in black neighborhoods perpetuates the wealth gap between black and white families. We hope that by bringing attention to our case and this court settlement, we can help change the way the appraisal industry works and we can see a different trend.”

The Austins bought the $550,000 house in 2016, feeling like they’ve got “a piece of the American dream,” according to ABC 7.

The four-bedroom, two-bath home is located in Sausalito, known for having one of the most expensive postcodes in the country. According to Realtor, the median property price in the prestigious enclave is a mind-blowing $2 million.

A few years after buying the house, Austin decided to have it appraised, and an expert said it was worth about $890,000.

The couple subsequently decided to renovate the 1960s home, spending over $400,000 on a major renovation, adding a whole new level as well as a new porch, fireplace and new luxury appliances.

When Jeanette Miller came to appraise the house in 2020, they were confident the house would be worth over $1 million and were stunned by her $998,000 figure.

“It was a slap in the face,” Paul told ABC7, with his wife adding that the amount seemed “incredible.”

The Austins were eventually approved for re-evaluation with the help of real estate appraisers Miller and Perotti, but this time they decided that one of their white buddies was impersonating the owner of the house.

“We had a conversation with one of our white girlfriends and she said, ‘No problem. I will be Tenisha. I will bring some photos of my family,” Tenisha recalls. “She made our house look like it belongs to her.”

The home was revalued at $1.48 million – about $500,000 more than it was valued just weeks before.

“There are consequences to our ability to create wealth for generations or pass things on if our homes are valued at 50% below their value,” Tenisha told ABC7.

The Austins decided to sue, and the Northern California Fair Housing Advocates joined the lawsuit as a co-plaintiff.

Miller’s lawyers initially responded to the allegations of racism by writing a defense to the lawsuit stating: “There is nothing intrinsically racist about choosing comparable properties located in the same city as the Object of the Object without any direct (or indirect) evidence of actual racial discrimination, Miller’s selection of comparable facilities cannot serve as a basis for Plaintiff’s allegation of discrimination.”

However, the property appraiser eventually agreed to an out-of-court settlement.

“I think everyone involved in this case was ready to move on,” said Caroline Pitti, executive director of Fair Housing, San Jose Mercury News.

“Obviously we felt we had a strong case, otherwise we wouldn’t have pursued them,” she added. “[But] Filing a lawsuit based on evidence is one thing, but how the judge decides is a separate matter. You can never be sure of a particular outcome.”