(Why over 200,000 Harris County home owners are over-taxed by more than 10% and 30,000 are over-taxed by 50%)

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? Since HCAD is not able to physically inspect the subject property in person, this limits the quality of their data.

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%. Most home owners have no idea that such a large number of houses are over-taxes.

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 77377. 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

77377

18003 Country Hls

161%

$489,137 $304,500 Rogers William G

77377

12434 Exbury Ct

138%

$293,342 $212,000 Rodgers Larry & Jennifer K

77377

12238 Cardston Ct

137%

$97,161 $71,000 Calveti Juan L

77377

15518 Lago Villa Dr

134%

$131,780 $98,000 Vestige Holdings Lp

77377

16015 Lutheran School Rd

130%

$544,256 $420,000 Theiss David H & Doris

77377

17507 Bermondsey Ct

129%

$246,851 $191,600 Guinn James E & Kristen A

77377

12225 Medina Lake Dr

123%

$144,644 $117,500 Bank Of America

77377

18810 Oxley Ct

119%

$287,562 $241,000 Symington James H

77377

22603 Cardinal Ln

119%

$332,059 $280,000 Gimmler Jessica B

77377

20143 Stone Creek Ct

116%

$405,292 $350,000 Federal National Mortgage Brock Jeff M

77377

29722 Orchard Grove Dr

116%

$432,903 $374,000 Vanmook Brian J & Yesmin

77377

15623 Hermitage Oaks Dr

115%

$218,389 $190,000 Berry Charles

77377

18227 Gravenhurst Ln

115%

$148,117 $129,000 American Homes 4 Rent

77377

22223 Main Blvd

115%

$175,180 $152,900 Mcdaniel Katherine I

77377

18731 Peralta Hill Ln

114%

$257,071 $225,000 Budzisz Erica & Adam

77377

17522 Bermondsey Ct

114%

$204,921 $179,900 Frazier Michael L & Patricia C

77377

13050 Chatfield Manor Ln

114%

$180,804 $159,000 Rowell Mitchell S

77377

18106 Almonte Ln

114%

$102,393 $90,200 Taylor Linda

77377

15502 Gettysburg Dr

113%

$174,591 $155,000 Helton Ronald W Ii

77377

18627 Summercliff Ln

113%

$246,495 $219,000 Tonthat Manhsang

77377

12727 Robins Crest Dr

112%

$253,042 $225,000 Lubenow James & Catherine C

77377

12722 Wandering Streams Dr

112%

$263,650 $235,000 Wegner Walter W & Barbara J

77377

17306 Village Breeze Dr

112%

$300,149 $268,600 Winebrenner Timothy & Sarah

77377

17714 Placid Trails Dr

111%

$250,389 $224,900 Airey Stephen

77377

18827 Magnolia Arbor Ln

111%

$161,280 $145,000 Wgh Texas LLC

77377

12822 Portales Pointe Ln

110%

$153,163 $139,500 Crawford Jeffrey L & Chiristene M

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 31is on a weekend. However, the owner will not be aware of the consequence until early next year.

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. Conversely, part of preparing a mass appraisal does not include inspecting the subject properties.

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.

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.

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 district’s 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.

After you protest and obtain the appraisal district’s 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.

For more information, contact Charlissa Holman at 713 375 4367 or Patrick O’Connor 713 822 8613.