(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?

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.

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.

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 77450. 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
77450 1023 Powder River Dr 175% $151,301 $86,362 Sturdivant Robert E
77450 21302 Park Willow Dr 143% $181,853 $127,000 Veterans Affairs
77450 903 Mountain Meadows Dr 142% $120,523 $85,107 Wilson Jack
77450 23030 Chelsen Bridge Ln 140% $188,855 $135,000 Parham Pourjavadi
77450 1014 Rennie Dr 138% $234,953 $170,000 Lilley Samuel P & Gabrielle
77450 19806 Almond Park Ln 138% $521,890 $378,000 Tahoun Sherif A
77450 21627 Park Villa Dr 136% $152,173 $112,000 Nguyen Thuy K
77450 21103 Park York Dr 136% $166,147 $122,000 Newberry Brian
77450 214 Houghton Rd 136% $196,761 $145,000 Vinogradova Tatiana
77450 2610 Shaly Ct 130% $1,048,054 $808,500 Vardalos Nicholas P
77450 1687 Kelliwood Oaks Dr 129% $470,272 $365,000 Pierce Jason C & Sherry C
77450 607 Abbotswood Ct 128% $303,248 $237,500 Netherton Zachary D & Lindsay L
77450 20510 Hampshire Rocks Dr 127% $212,182 $167,000 Noyes Arthur A
77450 1142 Barkston Dr 126% $293,388 $232,000 Borgstedte Christina
77450 727 Canyon Garden Dr 125% $135,428 $108,000 Henneke Gene
77450 21455 Park Timbers Ln 124% $111,688 $90,000 Marmaduke Matthew R
77450 22219 Merrymount Dr 120% $110,193 $92,000 Federal Home Loan Mortgage Corporation
77450 20902 Park Brush Cir 120% $158,551 $132,500 Dolara Andrea
77450 21534 Tallow Grove Ln 120% $223,007 $186,000 Gudapati Gopala K
77450 22015 Wickfield Dr 119% $274,639 $230,000 Bourg Earl L & Lorraine F
77450 20606 MONTVIEW CT 117% $252,037 $215,000 Wilkins David A & Jennifer Z
77450 2322 Bristol Band Ln 117% $251,385 $215,000 Calica Farah
77450 20411 Gable Ridge Dr 117% $314,346 $269,000 Hyperion Homes Texas
77450 1915 Lytham Ln 117% $439,296 $374,000 Azadan Rod J
77450 2427 Braypark Ln 116% $244,331 $210,000 Pannu Dawindar S
77450 22011 Rockchester Dr 116% $294,980 $255,000 Woodard Mark E & Tamara L
77450 1311 Hidden Canyon Rd 115% $165,224 $143,200 Wgh Texas LLC
77450 20302 Monkswood Dr 115% $164,581 $142,500 Nguyen Angela L
77450 710 Cascet Ct 115% $224,090 $195,000 Huang Catherine K
77450 20303 Brondesbury Dr 114% $239,741 $210,000 Kaiser Stephen L & Vicki S
77450 711 Rennie Dr 113% $211,512 $186,500 Fernandez Jose & Maria
77450 2515 Gable Hollow Ln 113% $251,739 $222,000 Yang Yaochung &
77450 2910 Silverbit Trail Ln 113% $281,762 $250,000 Stone Gary B
77450 20015 Tilstock Dr 113% $433,006 $382,000 Lucy Scott & Lizana
77450 1143 Rock Canyon Dr 112% $105,513 $94,500 King Lunette W
77450 1914 Bevington Oaks Cir 112% $188,664 $169,000 Zang Donghui
77450 1119 Rennie Dr 112% $211,703 $188,500 Delaroche Luis F & Clara I
77450 20707 Mustang Falls Ct 112% $230,754 $206,000 Current Owner
77450 20614 Laurel Lock Dr 112% $241,502 $216,000 Hernandez Linda & Arnold R
77450 1243 Summer Park Ln 111% $131,429 $117,900 Zern Jeremy A & Candi B
77450 1114 Oxborough Dr 111% $170,032 $152,500 Hopkins Kira
77450 21506 Cedar Cove Dr 111% $188,616 $170,000 Brown Melissa D & Richard A
77450 20506 Chadbury Park Dr 111% $294,305 $265,000 Abouchaker Hosniye
77450 21303 Park Brook Dr 110% $159,276 $145,000 Olson Virginia L
77450 20222 Laurel Lock Dr 110% $199,718 $181,000 Pecan Homes LLC
77450 20119 Kingsland Blvd 110% $218,124 $198,000 Nguyen Richard & Virginia

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.

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).

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. Harris County Appraisal District also does not recognize seller concessions, which reduce the true sales price.

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. A computer model simply generates an estimate of value, based on the data provided.

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. 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 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 Houston Realtors make the photos of properties sold are on-line after the sale. For Harris County Appraisal District, you can access these at har.com.

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 Pat O’Connor at 713 822 8613.