Appraisal districts use a process called mass appraisal to value hundreds of thousands of houses. In Harris County, they value about 1.2 million houses each year, using a very limited staff. Most of the property inspections mandated by state low (every three years) are now done using aerial photography! Seriously, how much can you tell about the condition of a house viewing an aerial photograph?
In many cases, the computer-generated estimate of market value is within 10% of the true value. However, in about half the cases the value set by the appraisal district is either 10% high or low, because of defects in the mass appraisal process. This applies to Harris County Appraisal District and most other appraisal districts.
We believe about 30,000 homes in Harris County over-taxed by 50% or more in 2014. And about 5,000 homes in Harris County over-taxed by 100% or more. Between 200,000 and 300,000 Harris County taxes are over-taxed by at least 10%.
While this may seem incredible, it is due to the errors in appraisal district property records, inaccurate data regarding cost, depreciation and comparable sales. Further, most property owners have limited knowledge about the appeal process and believe myths about appealing property taxes. They do not understand the HCAD jargon of grade, CDU, level of remodel, land lines, etc. Compounding the problem is a reluctance to revise HCAD records. If an HCAD appraiser agrees a property is over-taxed, he will change the value. However, to correct fields of data such as grade, condition or land value is highly unusual. So the same problems occur from year to year, frustrating home owners and causing HCAD a consistently high appeal value. If Harris County Appraisal District would make updating the records part of the appraisal process, it would reduce the number of annual protests.
Since HCAD targets 100% of market value for their homes, half of all houses are over-taxed and half are under-taxed. The result is there are at least 200,000 houses in Harris County over-taxed by at least 10%. Following is a list of some of the most egregious examples of homes over-valued Zip Code 77388. If you recognize the address, please call the owner and make sure they protest.
Property Zip Code Property Address Assessment Ratio 2014 Market Value Gross Sale Price Owner Name
77388 21307 Meadowhill Dr 170% $102,281 $60,000 Perez Bertha M
77388 17811 Tall Cypress Dr 154% $181,527 $117,500 Dupre Chris
77388 19435 Dianeshire Dr 147% $171,198 $116,567 Romero Monica T
77388 4907 Larksong Ln 144% $108,306 $75,000 Maloney Katherine L
77388 3518 Rolling Forest Dr 142% $249,126 $175,000 Bv Trust
77388 4710 Coltwood Dr 138% $112,816 $82,000 Chien Chiate
77388 4202 Palisander Ct 135% $215,368 $160,000 Williams-Henry Dorothy
77388 4007 Fir Forest Dr 131% $143,580 $110,000 Gandin Paul Snowden Jr
77388 4623 Bridgestone Bend Dr 126% $169,433 $134,225 Fuller Michael A
77388 21514 Greenham Dr 126% $116,880 $92,635 Morning Sunshine Inc
77388 19109 Joanleigh Dr 123% $254,555 $207,000 Murray Shawn T & Annette A
77388 3407 Candlebrook Dr 122% $158,438 $129,900 Glenn Nichole M
77388 19314 Bremerton Ln 120% $377,956 $315,000 Holland Brandon S
77388 21738 Debray Dr 120% $157,781 $131,800 Cheung Sin Y
77388 4823 Marywood Dr 120% $104,595 $87,500 Velarde Xavier & Melissa
77388 21834 Mossy Field Ln 119% $138,660 $117,000 Benyahia Rabah
77388 21602 Long Castle Dr 118% $158,676 $135,000 Echols Trina L & Christopher D
77388 21631 Tophill Dr 117% $62,016 $53,000 Sun Pi Hai
77388 4218 Countrypark Dr 116% $271,543 $234,000 Luchsinger Walter & Leslie
77388 3914 Postwood Dr 115% $92,056 $80,000 Mudura Florian & Saveta
77388 19719 Teller Blvd 115% $209,659 $182,500 Rlh 123 Ltd
77388 4030 Evening Trail Dr 114% $137,138 $120,000 Lanier Edward I
77388 19814 Holly Walk 114% $199,200 $175,000 Hsbc Bank Trustee
77388 3411 Red Candle Dr 114% $167,327 $147,000 Butter Morris & Diane
77388 4815 Diehlwood Pl 113% $113,227 $100,000 Srp Sub LLC
77388 21226 Waymare Ln 113% $113,645 $100,400 Sfr Hou I LLC
77388 21307 Hannover Pines Dr 113% $214,730 $190,000 Jensen Roddle L & Shirley A
77388 18106 Cypress Spring Dr 113% $107,940 $95,519 Harrison Richard Ryan
77388 19211 Countryhills Ct 112% $181,076 $161,000 Garcia Aretemio
77388 3523 Cypresswood Dr 112% $162,593 $145,000 Buehler Laura J
77388 17515 Sorrel Ridge Dr 111% $144,741 $130,000 Bowden Robert & Joyce L
77388 5534 Bowles Ct 111% $165,581 $149,000 Walden Johnathan & Vanity
77388 2315 Floral Ridge Dr 111% $188,843 $170,000 Pham Khuy T
77388 3419 Blue Candle Dr 111% $188,254 $170,000 Sweat Nathan E & Ana B
77388 230 Magic Oaks Dr 110% $165,671 $150,000 Mercieca Raymond F & Karla
77388 4031 Fir Forest Dr 110% $147,893 $135,000 Patino Pedro
77388 4139 Cypress Lake Dr 110% $167,542 $153,000 Hyatt Jeraldine R
Since the property taxes are paid by the mortgage company for most home owners, the pain point for the home owner is about one year too late. When they receive the notice their monthly payment is increasing by $100 or $200 or more per month, the appeal deadline has likely passed. The property tax appeal deadline in Texas is May 31, or the following workday if May 31 is on a weekend.
The mortgage payment will not likely be increased until after the current year taxes are paid. For example, if your home is grossly over-assessed in 2014, the monthly payment will likely be adjusted in the Spring of 2015. But the deadline to protest your 2014 property taxes is May 31 (actually June 2 since May 31 is on a weekend). Hence, the deadline occurs almost a year before the home owner learns there is a problem.
There is really no meaningful relationship between the methodical work done by an independent fee appraiser and an appraisal district appraiser. The fee appraiser typically inspects and measures the subject property, so he has accurate data. He also personally visits each of the comparable sales to see if they are really comparable.
For homes build before 1980, an appraisal district appraiser has almost never seen the inside of the house. They just guess at the quality of construction and condition. For homes built after 1980, the appraisers attempt to measure them. However, they are often not completed when the appraisers measure them, leading to errors including size (by double counting vaulted ceilings), and level of finish. Curiously, appraisers at Harris County Appraisal District give equal credence to their data on homes built before and after 1980.
The appraisal districts errors regarding your property are compounded by errors in their information regarding comparable sales. The appraisal districts commit several errors systematically that tend to cause them to over-tax home owners. First, properties that sell are typically prepared for sale by putting them in prime condition. Properties that sell have often been recently painted, have new flooring, a new roof, a new HVAC and other similar items. If a buyer was considering buying a typical house not prepared for sale and one that had been prepared as advised by the Realtor, the buyer would certainly pay more for the latter. HCAD terms the cost of preparing a home for sale maintenance and does not recognize any difference in condition between a recently sold house and a livable house.
A second serious problem is that appraisal districts tend to use sales that have been remodeled to value houses that have not been remodeled. Incredibly, the insular culture at some appraisal districts, including Harris County Appraisal District, is they require you to prove your house has not been remodeled. This is simply a red herring to cover up the extensive errors in their evidence regarding comparable sales. There is no requirement that the property owner prove the appraisal districts records are correct. If anything, the appraisal district doubting the accuracy of their evidence about your house should undermine their credibility on other issues. If the appraisal district is saying their evidence about your house may not be accurate, why should we give much consideration to any of their other evidence?
In addition to errors regarding the information about your house and the errors regarding the comparable sales, the model used by the appraisal district is imperfect. There is no model that can consistently value houses with precision.
Texas law requires property owners to file a property tax protest to be able to obtain the evidence regarding their house. Protest both market value and unequal appraisal and include a note asking the appraisal district to make their evidence available two weeks prior to the hearing. The protest form is available at http://www.poconnor.com/pdf_forms/41-44.pdf
In many cases, given the large number of substantial errors in valuing houses, the appraisal districts evidence will clearly show the property is over-assessed. It is critical that you protest prior to May 31, or you will not be able to get the information and determine if you are taxed fairly. Since over 200,000 houses in Harris County are over-taxed by at least 10%, encourage your family and friends to protest, so they at least get to see the appraisal districts evidence.
After you protest and obtain the appraisal districts information, one of the first priorities is to see if their evidence is accurate for your house. Then check to see if the sales data is accurate.
The data used for analysis was all sales of houses in Harris County that occurred during October 1 2013 to March 31 2014, for which we had a purchase price and a 2014 HCAD market value. The only records that were eliminated were those where there was a major discrepancy between the Realtor MLS data and the HCAD tax roll regarding the size of the land and / or building. Stated differently, this analysis includes all sales except those for which complete information was not available.
For more information, contact Charlissa Holman at 713 375 4367 or Patrick OConnor 713 822 8613.