(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 77429. 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
77429 15703 Morley Dr 166% $124,863 $75,000 Current Owner
77429 12715 Timberlake Dr 155% $197,984 $127,611 Harkor Homes LLC
77429 14906 Mills Park Ln 149% $178,536 $119,500 Us Bank Trustee
77429 14003 Greenwood Manor Dr 147% $419,501 $285,000 Metcalf Jonathan
77429 12411 Tall Forest Dr 138% $165,199 $120,000 Riffle Tia J
77429 14235 Cellini Dr 134% $91,397 $68,000 Mnsf Houston LLC
77429 12814 Timberlake Dr 130% $126,363 $97,000 Schneider Alan K
77429 14715 Cypress Green Dr 130% $148,631 $114,149 Nair Aravind K
77429 15207 Opera House Row Dr 129% $241,954 $188,000 Burns Daniel K & Christa
77429 16102 Union Pointe Ct 128% $371,925 $290,000 Sanchez Rogelio & Leenett
77429 15503 Hillside Terrace Ln 124% $584,244 $470,000 Shelton Kirk M & Sherri D
77429 13003 Belgrave Dr 124% $197,846 $160,000 Vasquez Michelle
77429 16538 Cypress Thicket Dr 124% $197,706 $160,000 Ramirez-Deschyma Maria R
77429 11926 Cottonwood Ln 122% $144,070 $117,850 Dupree Rose M
77429 15306 Sableton Crest Ln 121% $164,841 $136,000 Veterans Affairs
77429 14906 Mills Park Ln 121% $178,536 $147,644 Us Bank Trustee
77429 14623 Village Cir 120% $496,321 $415,000 Monariti Anthony & Billie J
77429 16530 Tejas Trl 119% $105,366 $88,250 Brenda Thorson Trust C/O Edward Jones Trust Company
77429 13135 Tarbet Place Ct 119% $219,961 $185,000 Villarreal Bobby E
77429 13710 Cypress Pond Cir 119% $556,398 $468,888 Galette Junior
77429 18511 Burgundy Sky Way 119% $141,152 $119,000 Dhaliwal Sukhdeep S
77429 11235 Rocky Mill Dr 118% $173,977 $147,000 Robinson Marisa
77429 15507 Elm Leaf Pl 117% $136,224 $116,000 Stanberry Artemesia
77429 15426 Sableton Crest Ln 117% $133,382 $113,827 Gibbings Kurt
77429 15919 Arapaho Bend Ln 117% $177,836 $152,000 Rodriguez Ricardo Jr & Irma E
77429 11806 Regency Pine Dr 117% $233,289 $200,000 Brooks Joy L
77429 13911 Maple Cliff Ln 116% $584,856 $505,000 Nguyen Tony & Luise
77429 15918 Randall Ridge Ln 115% $175,778 $152,500 Bui Tri Q
77429 14927 Mills Park Ln 114% $162,593 $142,500 Fritz Roger D & Shannon R
77429 15606 Kellan Ct 114% $391,820 $345,000 James Matthew E & Kimberly D
77429 16147 Cole Bridge Ln 113% $169,719 $150,000 Harmon Elshivo K & Tracy L
77429 14227 Cypress Falls Dr 113% $180,205 $159,500 Massines Mathieu & Priscilla
77429 18223 Blake Valley Ln 113% $129,804 $115,100 Kittleberger Jason A & Donna L
77429 15310 Fir Woods Ln 113% $144,947 $128,700 Robinson-Anemelu Ashley S
77429 21507 Mccamey Dr 112% $207,785 $185,000 Cerna Omar A & Levy R
77429 15211 Opera House Row Dr 112% $256,801 $229,000 Vega Xochitl
77429 17903 Double Bay Rd 112% $233,640 $208,500 Jordan James T & Marsha
77429 14935 Mills Park Ln 112% $155,474 $138,950 American Homes 4 Rent Properties 8 LLC
77429 13934 Conner Park Dr 112% $318,659 $285,000 Herbert Glenn Jr & Marissa
77429 14211 Cypress Meadow Dr 112% $149,198 $133,675 Johansing Tabatha M
77429 14415 Keystone Green Dr 111% $111,462 $100,000 Tiong Koh K
77429 15807 KINGS CYPRESS LN 111% $121,268 $109,000 Memca Aleksandar & Elizabeta
77429 13906 Winding Cypress Brook Dr 111% $181,811 $163,500 Oconnor Joshua T & Ashley
77429 16302 Broway Ln 111% $151,725 $136,500 Dempsey Matthew P & Maria F
77429 14422 Meadow Estates Ln 111% $216,610 $194,900 Cho Jae S
77429 11950 Galentine Pt 111% $305,413 $275,000 Chahine Mohamad K
77429 18226 Valebluff Ln 111% $149,810 $135,000 Freo Texas LLC
77429 14222 Blair Ridge Dr 111% $393,918 $355,000 Yang Chien Lung
77429 13107 Rockhill Point Dr 111% $219,405 $198,000 Yin Huaixia
77429 14923 Windmill Cove Ln 110% $267,598 $243,000 Schuelke David & Sue
77429 14318 Millstone Estates Ln 110% $220,137 $200,000 Perkins C Denny
77429 13003 Shady Knoll Ln 110% $124,718 $113,500 Benedict Brian
77429 14611 Gearen Ct 110% $168,055 $153,000 Smith Tekisha S & Barry L

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).

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. 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.

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.