Black couple sue white appraiser who undervalued home by $500K

A black couple has settled a lawsuit with a property appraiser who undervalued their California home by almost half a million dollars.

Paul Austin and Tenisha Tate-Austin’s four-bedroom residence in swanky Sausalito, near San Francisco, was valued at $998,000 by Janette Miller, co-owner of Miller and Perotti Real Estate Appraisers. That figure was $455,000 lower than an appraisal done for a prior mortgage refinance in 2019. 

Feeling that their home was worth much more money, the Austins asked one of their white pals to pose as the owner of their residence. They had the home reappraised — and it was suddenly worth $1.48 million.

The Austins decided to sue Miller and her company claiming that her appraisal was “the direct product of racial discrimination.”

The case has now been settled out of court, with Miller agreeing to pay an undisclosed sum of money to the couple. The settlement also includes an unusual twist: The appraiser was also required to watch “Our America: Lowballed,” a documentary about their “white-washed” saga.

“Having to experience everything that came with receiving the lowballed appraisal was overwhelming,” Paul Austin, 47, said in a statement. “Being able to tell our story and knowing we had legal recourse helped.”

Wife Tenisha, 43, added: “The ongoing undervaluation of homes in black neighborhoods perpetuates the wealth gap between black and white families. We hope by bringing attention to our case and this lawsuit settlement, we can help change the way the appraisal industry operates, and we can start to see a different trend.”

The Austins purchased the home for $550,000 in 2016, feeling that they had obtained “a slice of the American Dream,” ABC 7 reported.

The four-bedroom, two-bathroom home is in Sausalito, famed for having one of the country’s most expensive zip codes. According to Realtor, the average listing price for a property in the upscale enclave stands at an eye-popping $2 million.

Several years after purchasing the home, the Austins decided to have it appraised, with an expert saying it was worth around $890,000.

The couple subsequently decided to renovate the home, which was built in the 1960s, pouring more than $400,000 into an overhaul, adding an entirely new level, as well as a new deck, a fireplace and flashy new appliances.

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

“It was a slap in the face,” Paul told ABC7, while his wife added that the sum seemed “unbelievable.”

The Austins were eventually approved for a second appraisal with Miller and Perotti Real Estate Appraisers — but this time decided to have one of their white pals pose as the home’s owner.

“We had a conversation with one of our white friends, and she said ‘No problem. I’ll be Tenisha. I’ll bring over some pictures of my family,’ ” Tenisha recalled. “She made our home look like it belonged to her.”

The home was reappraised at $1.48 million — roughly $500,000 more than it was valued at just weeks prior.

“There are implications to our ability to create generational wealth or passing things on if our houses appraise for 50% less than its value,” Tenisha told ABC7.

The Austins decided to sue, with Fair Housing Advocates of Northern California participating in the suit as a co-plaintiff.

Miller’s attorneys initially hit back at racism claims, writing in a rejoinder to the suit which stated: “There is nothing inherently racist about choosing comparable properties that are located in the same city as the Subject Property, Without any direct (or indirect) evidence of actual racial discrimination, Miller’s choice of comparable properties cannot support Plaintiff’s claim of discrimination.”

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

“I think everybody involved with the case was ready to move on,” Caroline Peattie, the executive director of Fair Housing, told San Jose Mercury News.

“Obviously we felt we had a strong case or else we wouldn’t have pursued it in the first place,” she added. “[But] Filing a lawsuit on the strength of the evidence is one thing and how a judge will rule is a separate question. You’re never assured of a particular outcome.”