Summary List Placement
Tiffany Aliche already knew the deal. She’d heard stories about how homes owned by Black people are often undervalued in the marketplace. However, she didn’t expect to have her own tale to tell.
Earlier this year, she was planning to do a cash-out refinance on her home; the process requires an appraisal. Aliche, founder of The Budgetnista, a financial education company, went in with eyes wide open — if the country hadn’t been under quarantine, she says, she would have had a white friend pretend to be her when the appraisers came, and put away her family photos.
Still, she hid personal photos for the appraiser’s visit, but there was no getting around the fact that her home was in a predominantly Black neighborhood in Newark, New Jersey. The appraiser valued the five-bedroom, three-and-a-half-bath home with a finished basement, two laundry rooms, all new plumbing and electric, and other bells and whistles at $390,000.
“I was disheartened, disappointed, but sadly, not surprised,” says Aliche, who paid $800 for the appraisal.
She knew it was low. Aliche asked a realtor to check comparable sales of homes nearby; they determined the appraisal was at least $30,000 too low, especially given the fact that the home is in a historic district and at the time homes were selling at new highs.
Aliche decided not to go forward with the cash-out refinance, so she didn’t challenge the appraisal. But the experience still stings. “When so much of your wealth is tied to home ownership, how do you make up for the gap when your home is undervalued? You can’t outwork racism,” she says.
Homes in Black neighborhoods are regularly undervalued in the US
Her experience is not unique.
According to a 2018 report from the Brookings Institution, owner-occupied homes in majority-Black neighborhoods are undervalued by $48,000 …read more
Source:: Business Insider