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A Black couple in Northern California is suing an appraisal company after their home valuation was $500,000 less than when they staged their white friend as the homeowner.
Paul Austin and his wife Tenisha Tate-Austin bought their home in 2016 for $550,000. Since then, Paul said he has put in about $400,000 worth of home renovations.
“It was work, but it was exciting,” Austin told KGO.
The couple remodeled the kitchen and bathroom and refinished hardwood floors. They also replaced old windows and re-painted the home’s interior.
According to the filed lawsuit, the property was appraised in 2018 after some of the renovations were completed. Appraisers set the home’s value at $864,000.
The couple kept renovating, adding a new foundation and retaining wall, putting in a deck and a gas fireplace, and adding living space in the basement. They even created a separate unit complete with its own kitchen and bathroom.
After another appraisal in March of 2019, the value of the home was $1.45 million. Austin then decided to refinance their mortgage, the lawsuit states.
New home seemingly rooted in racial bias
In early 2020, as interest rates fell at the start of the pandemic, the couple decided to refinance again.
The couple reached out to Janette Miller and her company, Miller and Perotti Real Estate Appraisals, to value the house.
“I read the appraisal, I looked at the number I was like ‘this is unbelievable’,” Tenisha said.
The company had appraised their home at less only $989,000, or just $100,000 more than the value before they finished most renovations.
“It was a slap in the face,” said Paul.
That’s when the couple contacted their friend Jan, who is White, to stage the house as if it was her’s. The Austins removed their family photos and African-themed art and staged the house with photos of Jan’s family. With Jan acting as the homeowner, the valuation came in at $1.48 million.
The Austins, along with the nonprofit Fair Housing Advocates of Northern California, are now suing Miller and her company for giving a lowball valuation because the couple is Black, according to the lawsuit. They’re seeking financial damages and asking the court to order the defendants to ensure they won’t discriminate when appraising homes in the future.