It's That Time - Property Appraisal Advice Needed

[Reefmonkey]

Okay, I just went to my HCAD informal hearing yesterday. No reduction. I'm not really disappointed, as I expected it to be just a motion I had to go through to get to the ARB, which is next week.

A little background: I live out in the West Memorial area, in one of the 1960s-era Kickerillo neighborhoods in SBISD. I bought my house in June 2006, height of the real estate boom. It was my first time buying a house, I'm a scientist, not a businessman, the guy I bought it from is a CPA and a shrewd horsetrader. My wife and I had been pretty frustrated by the housing market at that time, were kind of desparate to get into something before the new schoolyear, we liked this house, and even though the previous owner didn't budge on stuff as much as we thought he should have after the inspection, we did buy the house. Bottom line - we paid too much for the house. Fortunately, not more than we can afford, and we got a traditional mortgage with a good interest rate, so really, the only time our stupidity at paying too much comes to bite us is when we pay the taxes, which we can afford, but obviously would like to be lower.

The house was built in 1965, about 2200 sq.ft., about 7800 sq. ft. lot. It's one story. We paid 308K. Last year, I went to HCAD, protested the market value, which was what we paid for it, without much confidence (and terribly naive about the process), but got a little moral victory out of getting it lowered to 299K. I thought "fair enough, we just bought it, so what we paid for it is the best they have to go by what it is worth."

Now it is a new year, and not only is there a little more time past since the purchase, the country is at the bottom of a major real estate slump. I figure that HCAD's purpose is not to perpetually punish me for my stupidity as a first time buyer, but assign me a fair and accurate market value for what the average buyer would pay for my house.

Well, this year, the market value for my house was raised to 332K. Appraisal value is 329K A standard 10% increase, maximum homestead exemption will allow them.

There are many houses on my street that are practically identical to mine in age, dimensions, condition. I looked at HCAD's website of this year's appraisals of them, and did a little math. HCAD

[Reefmonkey]

O'Connor isn't always Johnny-on-the-spot. I got the same letter you described last year a week after my protest hearing.

Tell me about it with O'Conner not being Johnny-on-the-spot. I looked into using them last year, and had a pretty bad experience that will keep me from ever using them. Last year I filled out O'Conner's online form showing my interest in having them represent me the same day I filed my protest. Didn't hear from them, didn't hear from them, didn't hear from them - then realized I was going to be in Japan for work for two weeks, including the day of my hearing. I called HCAD and got my hearing pushed back to right after I got back from Japan. While I was still in Japan, got an email from my secretary telling me O'Conner called for me. This was several days after my initially scheduled date, and it was the first time I had heard from them. I got back from Japan on a saturday, with my rescheduled hearing the following monday. I found in my mail a packet from O'Conner that had been postmarked the previous thursday. I was supposed to fill that out with all the information on my house, sign an agreement, and get it back to them. Forget it, I would handle my protest myself. I got to HCAD that monday, checked in, the woman could not find me in the system, even though I had my yellow appointment sheet there. Turns out she found O'Conner had gotten attached to my account (even though I had never signed anything with them), and it was a pain getting them detached.

So this year, a couple of weeks ago, I got a message from O'Conner, saying that unless I returned their call, they would assume I had given them the right to represent me. I called and gave them holy hell, told them they better not screw up my account with HCAD again this year.

[OkieEric]

Has anyone actually heard back from iSettle yet? I'm starting to question why I even used it, since physically going there last year worked out well enough

[spiderman]

I was browsing the HCAD web site and noticed that my protest hearing(s) have been scheduled.

I went to iFile and downloaded the evidence summary. I noticed that the "Subject Appraisal Ratio" is 1.11. This appears to be the ratio between the "Subject HCAD Noticed Market Value" (which is what my 2008 appraisal value is now) and the "Subject Indicated Market Value".

Does this mean that reducing my appraised value by 11% is a slam dunk? For example, if my "HCAD Noticed Market Value" is $111,000, and my "Subject Indicated Market Value" is $100,000, does it mean that HCAD will lower my appraisal from $111,000 to $100,000 once I point this out in the informal hearing?

This is rental property in Montrose, there is quite a large variation (28%) between the lowest and comps on the HCAD comparable sales analysis.

[KatieDidIt]

Has anyone actually heard back from iSettle yet? I'm starting to question why I even used it, since physically going there last year worked out well enough

Not a word yet. They have me higher than any other house on the street right now by quite a bit, so hopefully they are fixing that.

[musicman]

Has anyone actually heard back from iSettle yet? I'm starting to question why I even used it, since physically going there last year worked out well enough

yep. i received an email last saturday and i had a week to respond. while they did go down about 10k from the original letter, it was still higher than last yr. i replied that i want to go to the board.

[jm1fd]

Has anyone actually heard back from iSettle yet? I'm starting to question why I even used it, since physically going there last year worked out well enough

I recieved a response via eMail, then a letter in the mail a little while later. I'm ignoring their iSettle offer and protesting in person.

[spiderman]

I was browsing the HCAD web site and noticed that my protest hearing(s) have been scheduled.

I went to iFile and downloaded the evidence summary. I noticed that the "Subject Appraisal Ratio" is 1.11. This appears to be the ratio between the "Subject HCAD Noticed Market Value" (which is what my 2008 appraisal value is now) and the "Subject Indicated Market Value".

Does this mean that reducing my appraised value by 11% is a slam dunk? For example, if my "HCAD Noticed Market Value" is $111,000, and my "Subject Indicated Market Value" is $100,000, does it mean that HCAD will lower my appraisal from $111,000 to $100,000 once I point this out in the informal hearing?

This is rental property in Montrose, there is quite a large variation (28%) between the lowest and comps on the HCAD comparable sales analysis.

I had my informal this week, and the answer to my questiojn above is yes. But it gets even better if you are in HISD. the "ISD ratio" for HISD is 0.99, which means HCAD will multiply your "Subject Indicated Market Value" by 0.99 and offer that as their opening position, then hopefully you can negotiate downward from there.

[OkieEric]

WTF? Here is my response from iSettle:

Dear Property Owner: Thank you for signing up for our iSettle program. Unfortunately, after reviewing the information we have available, we cannot propose an online settlement for your 2008 protest. Since sales disclosure is not mandatory in Texas, we acknowledge that our market information may not be complete and that you may have evidence unique to your property that may support a reduction in your property

[musicman]

So all of this waiting (4 months) for nothing? I thought had a pretty compelling iFile, but I guess not... Does this mean I get an informal meeting first after all?

that's what it sounds like....you'll most likely be making two trips.

[OkieEric]

that's what it sounds like....you'll most likely be making two trips.

That's what I thought as well - I guess I get the first round since there was no iSettle offer. Man, iSettle really expedited the whole process! I'm glad it took them 4 flippin' months to come back with nothing

[jm1fd]

that's what it sounds like....you'll most likely be making two trips.

You can skip the first meeting, and show up for the second with no problem.

[musicman]

You can skip the first meeting, and show up for the second with no problem.

you better verify that cause i know someone who didn't show up and their's was settled for them. they usually don't even schedule you to go to the board til you go to meet with the appraiser the first time.

[KatieDidIt]

WTF? Here is my response from iSettle:

So all of this waiting (4 months) for nothing? I thought had a pretty compelling iFile, but I guess not... Does this mean I get an informal meeting first after all?

I got the same letter. That was fun. Anyway, I just finished with the informal and they put back down within the 10% raise. I'm still higher than many, but much lower than where they had me at. Not going onto the board.

But that isettle thing is silly. I really don't know what that was all about and I won't use it again. It would have been easier to protest while the kids were in school, rather than dragging them with me in July.

[Gatorkev]

This was my first time protesting (as it was my first time owning a home) We went today for our informal hearing with all of our comps, spreadsheets, pictures, etc. They had raised our market value by over 20k. The appraiser asked us if we just bought the house and what we paid for it. We told him we bought it last year for x dollars. He then said, well that is what we can lower the market value to. This was almost a 40K difference from the HCAD market this year to the market he came down to. He ended up going a little lower by multiplying it by the HISD number. We ended up with a large drop in market value just by spending 5 minutes with him and a few hours doing comps.

What a Racket!!

Do they purposefully increase the new home sales by a lot while their is no exemption in hope that people wil not protest?

We are really glad we protested ourselves and did not pay someone, as we were going to, to do if for us.

What a Racket.

Good luck

Kevin

[RedScare]

That's what I thought as well - I guess I get the first round since there was no iSettle offer. Man, iSettle really expedited the whole process! I'm glad it took them 4 flippin' months to come back with nothing

That's not necessarily a bad thing. By having your meetings later, you can review how your neighbors did. More info for you means better prepared to negotiate.

I had my informal a few weeks back. Since I was the last meeting of the day, my informal appraiser and I chatted for about 20 minutes. A few tips:

Don't go in angry, sarcastic or otherwise disagreeable. The adjuster has some latitude, but if you annoy them with the conspiracy or government ripoff talk, they will use that latitude to aim high. Is your anti-government rant that important to you?

Understand how property appraisal works. For all its problems, HCAD does have a sound basis for fundamental appraisals. The problem is they are trying to efficiently appraise a million parcels. They understand this and will adjust the numbers where appropriate. However, you must have a basis for your request. In my case, I did not protest the value for the land, as they had good information on that. I DID protest the valuation of the structure (house and garage) and they gave me every dollar I asked for, even though their number suggested it should be $5,000 to 7,000 higher. Why? Because I was knowledgeable and reasonable, in addition to first tip above.

While land values are often non-negotiable, the structure generally is. If you have done no work on your home in the last year, point that out and argue that the value of the house should be no higher than the year before, and probably should be a little lower due to depreciation. This should limit the increase to land appreciation only, which is the source of most increased appraisals anyway.

Understand that because this stuff is not very specific, you'll probably have to return next year to protest again. But, it should be short and sweet, as the same issues tend to repeat. I've protested on the same issues every year, and only the land valuation has stung me. BTW, Heights residents, be prepared for another land increase next year, to $35-37 per square foot.

Hope that helps.

[OkieEric]

That's not necessarily a bad thing. By having your meetings later, you can review how your neighbors did. More info for you means better prepared to negotiate.

I had my informal a few weeks back. Since I was the last meeting of the day, my informal appraiser and I chatted for about 20 minutes. A few tips:

Don't go in angry, sarcastic or otherwise disagreeable. The adjuster has some latitude, but if you annoy them with the conspiracy or government ripoff talk, they will use that latitude to aim high. Is your anti-government rant that important to you?

Understand how property appraisal works. For all its problems, HCAD does have a sound basis for fundamental appraisals. The problem is they are trying to efficiently appraise a million parcels. They understand this and will adjust the numbers where appropriate. However, you must have a basis for your request. In my case, I did not protest the value for the land, as they had good information on that. I DID protest the valuation of the structure (house and garage) and they gave me every dollar I asked for, even though their number suggested it should be $5,000 to 7,000 higher. Why? Because I was knowledgeable and reasonable, in addition to first tip above.

While land values are often non-negotiable, the structure generally is. If you have done no work on your home in the last year, point that out and argue that the value of the house should be no higher than the year before, and probably should be a little lower due to depreciation. This should limit the increase to land appreciation only, which is the source of most increased appraisals anyway.

Understand that because this stuff is not very specific, you'll probably have to return next year to protest again. But, it should be short and sweet, as the same issues tend to repeat. I've protested on the same issues every year, and only the land valuation has stung me. BTW, Heights residents, be prepared for another land increase next year, to $35-37 per square foot.

Hope that helps.

Good post - thanks for the tips. Sounds as if I might have a decent basis for protest, since the value of my structure went up 40% over the year before (no improvements, either), while there was virtually no change to land value.

[DaveMc]

I sent in my ifile/isettle ten minutes after the letter hit the mailbox.

I got a slightly different email response today:

Dear Property Owner: This is to let you know that we are still working on the 2008 protest you filed using HCAD's iFile system. Since you protested the value of a residential property and elected to participate in our online iSettle process, we may be able to make you an iSettle offer via e-mail. Whether or not we are able to make an iSettle offer, you will receive e-mail notification from the appraisal district.

If we are unable to make an offer, the Appraisal Review Board (ARB) will send you a notice by regular U.S. mail advising the date, time and place of your protest hearing. Scheduling notices are mailed at least 14 days prior to the formal hearing date. In either case, at the time you receive an iSettle offer or an ARB scheduling notice, you will be able to log into HCAD's iFile system to review our evidence on your property.

If you have questions, e-mail iSettle@hcad.org. Please include your account number and iFile Number for account verification.

Jim Robinson

Chief Appraiser

Harris County Appraisal District

Great

As usual they will schedule my meeting when I am not going to be available.

[jm1fd]

you better verify that cause i know someone who didn't show up and their's was settled for them. they usually don't even schedule you to go to the board til you go to meet with the appraiser the first time.

Last year they sent me scheduling info for the informal and formal hearings in one envelope. I called down there to tell them I wasn't going to do the informal, and they told me to just skip it and show up for the formal, no need to call. They may have changed it for this year. *shrug*

As usual they will schedule my meeting when I am not going to be available.

Call and re-schedule it for later in the year.

[jm1fd]

That's not necessarily a bad thing. By having your meetings later, you can review how your neighbors did.

Not only can you review how they did, but you can use their lowered values as the basis for an unequal appraisal protest. Best way to do it is to download HCAD's data sets from pdata.hcad.org (be sure to check the extract date on the data set), pull the data for your neighborhood into Excel, do some Excel-Fu to normalize all the properties to your property, then pick the 5 comparable homes with the lowest normalized values. You can get a spreadsheet that will do the calculations for you here.

The process I've outlined above is the same process that O'Connor uses when they generate the letter/analysis they send you every year.

[BaylorGuy05]

I just saw my 2008 appraisal on HCAD website. I own a small bungalow w/garage apt in Montrose and I rent both out. My appraised (market) value just went up 25% for no good reason to the value waaaay above anything I could sell that property for. I will definitely protest. I have several possible pathways to pursue in my protest:

1) Unequal appraisal: a similar house around the corner (similar street, larger lot) is appraised at 60% of mine solely because of land value: mine is assessed at $57 per foot while the other house at $35 per foot of land.

2) I just had mortgage refinanced and the bank appraised the property at about 80% of what HCAD thinks it is worth

3) Try to find "comparables" via MLS (either through a realtor or by going to HCAD)

4) Try to go by rental income

The most beneficial way is definitely the land value approach but I am not sure that it will work. And if it does not, could I bring up other arguments later in the hearing? Does anyone have experience/suggestions?

[Downtown]

I just saw my 2008 appraisal on HCAD website. I own a small bungalow w/garage apt in Montrose and I rent both out. My appraised (market) value just went up 25% for no good reason to the value waaaay above anything I could sell that property for. I will definitely protest. I have several possible pathways to pursue in my protest:

1) Unequal appraisal: a similar house around the corner (similar street, larger lot) is appraised at 60% of mine solely because of land value: mine is assessed at $57 per foot while the other house at $35 per foot of land.

2) I just had mortgage refinanced and the bank appraised the property at about 80% of what HCAD thinks it is worth

3) Try to find "comparables" via MLS (either through a realtor or by going to HCAD)

4) Try to go by rental income

The most beneficial way is definitely the land value approach but I am not sure that it will work. And if it does not, could I bring up other arguments later in the hearing? Does anyone have experience/suggestions?

I noticed ,the best way to get through to those people is to back your argument with plenty of PROOF-Lots of pictures, HAR printouts comparisons(e.g. one's remodeled,added on to, landscaped, improved,needs maintenance and one's not). It is mostly based on recent sales and unless you bought it in the last yr. or two; I don't think they will care about anything to do with rent or financing. See 'har.com'.10% rule if you've owned for more than a year. Mine made me want to cry too and I can protest two this year. keep in mind that Houston's housing market is on of the strongest in the nation. Eventhough our number sale droppped-our sale price increased. It was in the news today.

[Downtown]

I used the ---& Associates info.they sent to help prepare my protest. Every once in a while,they'll send a printout(comparison) with a handwritten note-Your property value is too high. Keep in mind their fee is very expensive for what you can do yourself eventhough they seem so convenient. I always wondered how effective they are compared with if you put more effort than them to prove. I noticed on the screen in the HCAD building that a LOT of people use those 2 companies. Don't remember if I'm allowed to name names here.

[Ross]

Cool, a link to downloadable data. Just what I've been looking for. I knew there was a reason to install SQL Server on my laptop. HCAD continues to be one of the best agencies around for providing data.

[CDeb]

2) I just had mortgage refinanced and the bank appraised the property at about 80% of what HCAD thinks it is worth

Try to go as low as possible, but if all else fails, a recent (within the past year) independent appraisal should be the highest you'll have to settle for.

[Heights8th]

Hi...we just had informal hearing today....appraised value was $200K more that Market....Anyway long story short,we did NOT accept their new calcuation which on

only lowered it by a few dollars...so we go to formal hearing in a few weeks. My husband has a file full of organized information for our case but they barely want to hear

it...Does anyone have any tips for the FORMAL BOARD HEARING.. We have 15 mins.....Hope we can make our case....

[musicman]

Does anyone have any tips for the FORMAL BOARD HEARING.. We have 15 mins.....Hope we can make our case....

make sure and have all your required copies so it will go smoothly and quickly. while i say having a logical argument is the best, some years i'm convinced it doesn't help. hopefully you have some good sales data from the prior full yr and your board thinks logically.

this yr actually went pretty well for me. the HCAD rep presented some similar houses (5 i think) to mine but i had more data than was presented by HCAD. they asked the HCAD rep whether his houses were on my list and were accurate. he said yes which was a good indication that i didn't present false information.

remember that your pics can't be verified by the board so the worse you can make it look the better.

[jm1fd]

Hi...we just had informal hearing today....appraised value was $200K more that Market....Anyway long story short,we did NOT accept their new calcuation which on

only lowered it by a few dollars...so we go to formal hearing in a few weeks. My husband has a file full of organized information for our case but they barely want to hear

it...Does anyone have any tips for the FORMAL BOARD HEARING.. We have 15 mins.....Hope we can make our case....

$200k more than actual market value? That should be SUPER easy to prove....if it is actually true.

You need cold, hard facts. The best facts to present are sales figures for houses which are virtually identical to your home, which may be problematic in the heights due to the wide variety of houses, lot sizes, and conditions of surrounding properties. The second best facts to present are HCAD's own market (NOT APPRAISED) values to houses which are virtually identical to yours.

The more different the houses you're comparing yours to, the weaker your case will be.

[spiderman]

Just noticed this on the HCAD web site - now that property values are dropping, they will not be doing a mass re-appraisal in 2009.

For the past several years, including 2008, HCAD has operated on an annual reappraisal cycle. Beginning in 2009, we will switch to a biennial cycle. We will continue to review the values of all properties each year, but in odd-numbered years such as 2009, will only make those value changes necessitated by new construction, unusual market conditions, or to maintain equity.

In the case of properties that change in value or have new ownership, a regular notice of appraised value will be mailed after 2009 values are complete (usually March or April). For properties on which there is no 2009 value change, even though the law doesn

[Subdude]

Just noticed this on the HCAD web site - now that property values are dropping, they will not be doing a mass re-appraisal in 2009.

Why, imagine that! I am shocked! Shocked!

They must be under enormous pressure to hold the line on appraisal values this year.