Black Homebuyers Are 'Whitewashing' Offers to Save Money—But They Shouldn't Have To

When Zanade Mann and her husband were looking for a new home in the greater New York City area, what they loved about their first-choice neighborhood was the good schools, diverse population, and moderate taxes. Unfortunately, Mann found something that many of the local sellers did not love: her family.

"We encountered some people not wanting us to walk through their front door at most of the homes we visited, even with a realtor present," Mann says. When she and her family were allowed in a home, Mann found many of the sellers to be extremely rude; she was scrutinized about her background and what she did for a living (Mann is the digital marketing and managing director for the Black Women's Business Collective). The poor treatment and rude responses got so bad, in fact, that Mann and her family decided to revisit their strategy for buying a home.

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The result: Mann found herself having to dress differently, appear more soft-spoken, and highlight her husband's military status. She explains that this was her effort to code-switch in the hopes that it would elicit welcoming responses from sellers and a better hope of her family getting to live in their desired neighborhood. Fortunately, the plan worked: She was able to view more houses and move her family into a home with welcoming neighbors. But going through this experience in order to get to her dream home left her heartbroken.

"While we are happy that we were able to purchase a home, the feeling that this left me inside was another story," she says. "This is racism in America: How we had to code-switch and be good, working people according to someone else's limited view to even get a slice of kindness towards us."

How common is code-switching and "whitewashing" in the home-buying process?

Unfortunately, Mann is not alone. In recent years, there have been more reports of unfair but seemingly necessary "whitewashing" in real estate—of Black families having to go to great lengths in terms of how they present themselves when buying or selling a home.

For example, The Washington Post reported a situation in which a Black couple suspected they were being offered an unfair appraisal evaluation based on their race. When they had white friends pose as the owners of their home, they found the appraisal increase by $500,000. The difference in evaluations has resulted in further investigation and pending lawsuits. It also led to a bill for a task force aimed specifically at identifying and eliminating factors that are leading to ongoing discrimination in the real estate industry.

Of course, that variance in appraisals—as well as other obstacles Black people face when trying to obtain mortgages and own homes—contributes to the widening wealth gap in America. At the center of that wealth gap? There lies the systemic racism present in everything from pay inequalities to access to health care to higher mortgage interest rates—all of which add up to significant difficulties that Black people face in building wealth as well as in acquiring homes.

"This is racism in America: How we had to code-switch...according to someone else's limited view to even get a slice of kindness"

What racism in real estate means for housing prices

A 2021 study from Clever Real Estate found that homes in predominantly Black areas were given a much lower valuation in comparison to homes in predominantly white areas. One of the key findings of the survey showed that for every one percent increase in the number of Black people in the area's population, home value decreases by approximately $2,581.

In some cases, that translates into a home in a non-Black-predominant area being valued almost 600 percent more than a similar house in a predominantly Black neighborhood, explains Dr. Francesca Ortegren, Ph.D., of Clever Real Estate, one of the researchers involved in the study.

But what about the Black homeowners in predominantly white neighborhoods?

Home appraisers are held by a code of ethics not to discriminate on the basis of someone's sexuality, gender race, or religion; they can lose their license if found guilty of doing so. Still, Black individuals' experiences—and viral posts such as this one about the rude behavior of an appraiser towards a Black homeowner in a predominantly white neighborhood—make it clear that appraisal discrimination exists.

What's the way forward?

Homeownership Equality Research Organization (HERO) is one of the organizations making an effort to improve access to wealth by bringing homeownership within reach through building debt management and mortgage assistance. Because many Black people are kept from homeownership due to the inability to get a mortgage based on debt-to-income ratio, the organization assists with providing grants to pay off a percentage of debt to increase credit score.

According to Kevin Golden, President of HERO, many programs only focus on the down payment, but in reality, it's the systemic issue of debt-to-income ratio that's affecting Black folks' mortgage rates and keeping them from homeownership—and from the ability to put money into improvements that can add value to their home and subsequently build more wealth.

The rise of virtual appraisals can help, too, explains Mark Walser, president of Incenter Appraisal Management. In virtual appraisals, there's less possibility of making judgments or exercising unconscious biases about the homeowner or neighborhood. Virtual takes the pressure off without taking away the ability to see the home, Walser suggests. Plus, virtual appraisals increase the probability of having someone other than the go-to appraisers in any given area—which opens up the possibility for more diversity, perspectives, and geographic competence, adds Walser.

Greater diversity among appraisers overall is essential, too. In 2019, 85 percent of real estate appraisers in the United States identified as white, while only four percent identified as Hispanic or Latino, and a mere one percent identified as Black. Of course, the path to becoming a certified appraiser is lengthy and costly; it requires many hours of supervised training under a mentor in an apprenticeship. All of this makes it inaccessible for many, which in turn lends to the current appraiser shortage; there has been a pronounced decline in the number of working appraisers ever since 2013.

The reality is that in today's real estate market, access and discrimination remain major issues—and continue to make accrual of wealth via homeownership a seemingly impossible goal for far too many Black individuals and families.

If you suspect discrimination during your house-hunt or appraisal process, you can fill a complaint with the Office of Fair Housing and Equal Opportunity or call the Appraisal Complaint National Hotline.