Recently my husband and I went to a property-tax appraisal workshop hosted by the Harris County appraisal district. It was a really eye-opening workshop that taught us more about the appraisal and protest process. We live in a suburb outside of Houston, the largest city in the United States with no zoning ordinances. As a result of the lack of zoning regulation, Houston sees a mix of small & industrial businesses residing alongside residential areas.
The appraisal district appraises property through computer assisted mass appraisal. This process enables the appraisal district to group similar properties and appraises them simultaneously. However, when you live in a community with minimal zoning regulations, valuation issues are sure to arise.
During the appraisal workshop, we were informed that the tax assessor office decides on a tax assessment to collect, the burden of which is then split among the residents and commercial parties. But what happens when these larger and financially powerful commercial interests begin to protest their taxes? Well, it seems that the burden is passed on to the local residents. One of the speakers cited a past Valero protest, which seemed to initiate the trend of corporations protesting property value appraisals. You can read more about that in this Houston Press article. In 2009, Valero successfully protested 75 million off its refinery appraisal, followed by a further reduction of 72 million. In general, it seems as though these massive appraisal discounts are being subsidized by the continuous appraisal appreciation of mid-range homes, despite what the market actually dictates.
I was surprised to learn this. The general impression I received from the workshop was that if we felt that our appraisal increase was incorrect we should protest because it likely was
A large problem in the community in which we were raised (low-income, immigrant, Spanish-speaking, etc) is the lack of awareness of availability of resources that could help them. Although our parents are homeowners, they are often not aware of benefits for which they qualified. For instance, for years they did not take advantage of the residential homestead exemption because they did not know it was available. And for years when these appraisal notices came in, my family members tended to accept the appraisals without question. I feel like it’s my priority to better inform myself on these processes so that I can share this information with my family because it’s those who don’t know any better who get screwed over the most. After the workshop I resolved to learn more about the protest process to fight any unfair increases.
What we did
1. Review the appraisal information and jot down any inconsistencies, such as incorrect square footage, room number, improvement listing (sheds, porch, etc).
When looking for this I actually saw that my grandfather’s house was listed as having an additional bathroom. Unfortunately, this means that for decades he has been paying for this
2. Create a spreadsheet that summarizes our appraisal information.
To keep things organized, we started with a spreadsheet that listed the property appraisal information (owner name, address, and account number). This was done on the suggestion of one of the workshop presenters. I looked for some templates online and took the best elements of what I found.
Our appraisal website breaks our appraisal down by land and improvement value. The physical home, along with additions such as sheds, porches, etc., would fall under “improvements.” The website also listed the square footage of each home. So to start, we created a line entry in our spreadsheet that broke down the appraised market value of the home in question by land value per square feet and improvement value per square feet.
3. Repeat step 2 for neighboring similar sized homes.
The Harris county appraisal website has a tool that allows users to search for nearby properties. The information that populates is the market appraised value and improvement square footage. Using this information, we were able to narrow down the similar sized homes. I read online that a good rule of thumb is to choose around 5 homes to which to compare. Try selecting the lowest-appraised of these homes that are still of comparable size. I then repeated step 2 for each of these homes by selecting their detailed account information and breaking down their improvement and land values by square footage.
4. Calculate the average improvement and market values per square foot (excluding property in question).
I then used that information to highlight the difference between these average values and the property values. For my mother’s property, I felt that the difference in values was particularly glaring. Use this average information to obtain a fairer estimate of what your actual market appraisal should be.
5. Take lots of pictures of every home defect
I saw this advice given in all the blog entries I read about protesting my property value. Basically, document every crack, stain, and physical defect to your home. The point is that a picture is worth a thousand words. I actually found this a little overwhelming when documenting my grandfather’s needed home repairs because it’s such an old house and there are so many repairs to be made. Examples of defects we documented were:
Damage to ceiling due to water damage
Cracks along exterior
6. Get estimates.
This goes a long way in validating those issues documented in step 5. Unfortunately I only had to time to get roof repair estimates. But estimates from a contractor would assist on justifying the cost of the needed repairs. Otherwise, use google to estimate the costs of repairs and jot those numbers down. My google search entries were basically “x repair cost estimate”. Lists these costs in your excel sheet and deduct from the appraised value you calculated in step 4.
The filing process was surprisingly easy since it could all be done online. We were asked to list the reasons why we were protesting, give an estimate of what the market appraised value should be and summarize our grievances in several hundred words. There was also an option to designate a representative (I added my name to my mother’s and grandfather’s protests). We also had an option called iSettle that allows us to have the appraisal district re-evaluate our appraisal without going through the hearings. I read that people have had mixed success with this, but I still chose to see what they have to offer.
Any documentation (photos, excel sheets, etc) is then uploaded on a separate page.
What we could do next time
1. Submit a sales value report of neighboring homes.
Unfortunately you only have access to actual sales price information if you are a realtor. I was advised to contact a realtor under the guise of selling/buying property to receive this info, but I couldn’t do it. My neighbor’s son is trying to become a realtor, so I might contact him next year 😉
2. Get an appraisal.
I didn’t go this route because I saw that costs start around $300. I would consider this if I was interested in refinancing my home (since an appraisal is required). Depending on how my appraisal(s) go this year, I might go this route next year.
I’m waiting on the result of the iSettle evaluations. If I choose to decline their proposed value, then the process would move on to the informal hearing. Around this time, the ‘comparable’ homes used to appraise the property protested should be uploaded to the system for me to review in a sort of discovery period. Since this is my first time protesting, I’m not sure of the timeline or the amount of evidence I’m expected to review.
If I disagree with the results of the informal hearing, I would then move on to the formal Appraisal Review Board (ARB) hearing.
I’ll provide updates as proceedings progress.
Has anyone here ever protested their address property value? What was your experience? Any tips or suggestions?