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Brother, Help Your Neighbor. Plus: HCAD using unreliable information on “renovation”

May 20, 2013

I was talking to my next door neighbor this weekend about HCAD values on our street, when she told me a disturbing story. A few years ago, they went in to protest their valuation, and the appraiser said “we know you have done all these renovations to your upstairs; one of your neighbors told us so.”

Now there are two possibilities here:

1. The appraiser was lying, which I honestly wouldn’t put past an HCAD employee given all the untruthful things that have been said to me by HCAD employees over the years, or

2. A neighbor really did tell HCAD about renovations.

I think that scenario 2 is probably more likely. I can imagine Neighbor B trying to get his appraisal lowered in his informal meeting saying “you have my house appraised for this much, but my neighbor’s house is only appraised for that much, and their house is much nicer than mine with all sorts of renovations, especially upstairs.”

This is extremely shortsighted. Even if Neighbor B did get a reduction that year because he sold out Neighbor A, what do we think happened the next year? HCAD obviously made note of the report of renovations to Neighbor A’s house, and used it against Neighbor A the next year. It doesn’t work out very well for Neighbor B either, and the next year Neighbor A’s elevated value is used to justify an elevated value for Neighbor B.

Protesting your property tax value is not a zero sum game. You can get a reduction in your value without having your reduction offset by a value increase for someone else. In fact, a value increase for someone else will eventually be used to justify a value increase for you. Don’t rat out your neighbors. You want them to have as low of a value as possible, because by law you have to be equally appraised. As a matter of fact, you should be helping your neighbors reduce their appraisal values. You may have neighbors on your street whose HCAD market values are through the roof because they haven’t protested in years. It might be because they are intimidated by the process, don’t know where to start. With older folks, it might be a combination of that and them not feeling the full impact of their increased market value because of their over 65 exemption. Start educating the people on your street, explain the impact their non protesting has on everyone else, remind them of the deadline, and offer to help them get started. This weekend I distributed letters to everyone on my street. My letter had every house’s HCAD market value, what Jubally thinks the market value should be, and the difference. It reminded them that the deadline is May 31, and offered them help preparing their protest. I also told them about Jubally’s great service that will do all the prep work for them for only $69. I told them that my interest in their property values is completely mercenary – I want their appraisal values to go down so mine will too.

Now that that is out of the way, I want to backtrack a little and revisit that story of the HCAD appraiser telling my neighbor he knew my neighbor’s home was recently renovated because another neighbor had told him so. This second-hand information was being used to justify a value increase on my neighbor’s house – how fair and reliable is that? First of all, HCAD does not even know if that information is truthful. One neighbor could have a grudge against another, and could be grossly exaggerating the level of renovation being done, or outright lying, when no renovation has been done, and yet HCAD has no problem using that information without any verification to justify its valuation increases.

Second, without even verifying for itself the extent of remodeling, HCAD is assigning a number value to how much the remodeling increases the value of the home. You can’t get more unscientific and arbitrary than that.

My house is listed as “extensively remodeled” in HCAD’s database. Every year, it is compared against other “extensively remodeled” houses. Interestingly, all these other “extensively remodeled” houses have a year listed that they were remodeled. My house has “NA” in that field.

Is my house actually extensively remodeled? No. In 2009, in my informal meeting, I actually got the rarest of species – the fair-minded, honest HCAD appraiser. He looked at all my pictures, of my bathroom fixtures, countertops, and cabinets from 1965, my vinyl siding from the 80s, the nonfunctional intercom and security systems from the 1970s, and said “that doesn’t look extensively remodeled to me” and gave me my asking value of $285,000. Yet apparently he did not have any power to change the “extensively remodeled” designation permanently in the system.

Why does HCAD rate my house as “extensively remodeled?” Because that is the kind of glossy language the realtor used when she listed the house in the MLS in 2006. The previous owner had made some superficial cosmetic changes, using the cheapest materials he could find so he could get a higher price, but much of it has not lasted. For instance, the new kitchen cabinets – not solid wood. As the screws from door and drawer pulls and hinges rip out of the cheap material, I have to go through and drill out a big hole and glue in an oak plug to give something to anchor onto. Yet HCAD grades my house “extensively remodeled” simply because the previous owner used misleading buzzwords to attract more prospective buyers to his house.

So here are two examples, literally right next to each other, of HCAD latching onto unreliable second-hand information and using it as justification to raise the values of houses by tens of thousands of dollars

  1. TM1 permalink

    There actually is a way to remove the “remodeled” code from your Hcad record. I have succeeded after two years of trying. It took several visits to speak with Hcad appraiser, photos of kitchen and bathrooms, and the absence of city and county permits on Hcad record for the year listed as the remodeled year. Appraiser does have the power to remove the code but will review it first with the head of their department. The value protests I filed in years before the visits in person did nothing to remove the remodel code from the permanent record. You need to file a correction request form. Appraiser may push for a field visit to inspect your property, but did not in my case. If this is an honest mistake and all faucets and appliances are old then they will remove the code and your building portion value could drop. The land portion will remain the same. I told them that I will not request the tax reimbursement from the value reduction for the current year, maybe that helped.

    Painting the walls is not considered a remodel. As the state allows tax districts to establish their own terminology, Hcad may count any hardware upgrades as a remodel because it extends the useful life of the property. If you have new fixtures (a catch-all term meaning stays with the house in a sale) this can and will be used to trigger the remodel code. Hcad has a residential appraisal manual for sale at their office which provides guidelines for different levels of remodel. Consider reading that if you plan any updates to your place.

    However, by trying to avoid paying your fair share of property taxes you reduce funding to schools which leads to higher crime in your particular neighborhood because each school district collects its own tax through Hcad from the nearby neighborhoods. Property taxes also pay for your police and your fire department.

    • badblogcollection permalink

      No one here is talking about avoiding paying their fair share, this blog is all about getting a fair shake against a corrupt appraisal district that tries to get residential owners to pay more than they should. That said, glad to hear it worked out for you well. Unfortunately I went throught the nonexistent Taxpayer Liaison Officer Teresa Terry all the to His Royal Corruptness Sands Steifer, and still have gotten nowhere, even though I had an expert witness swear under oath that my property was not remodeld, because once Stiefer took over last year, the unofficial policy became “stick it to the rant and file residential owners to make up for knuckling under to the big commercial owners.” This is why we have filed a lawsuit against HCAD. Read this article:

      • TM1 permalink

        Thank you for the link.
        The “fair share” comment was not aimed at you but only as a general observation; I should have worded it differently.
        I completely agree that a prospective homebuyer may need to watch the text in house ad and consider requesting the selling realtor to remove any words remodel, upgrade, update and such from ad before closing.

  2. badblogcollection permalink

    “I completely agree that a prospective homebuyer may need to watch the text in house ad and consider requesting the selling realtor to remove any words remodel, upgrade, update and such from ad before closing.”

    Words to live by. I don’t think most people give a second thought to the possibility of poorly worded listings haunting them at the appraisal district for years to come. Frankly, once you see the house and agree to a price, you normally don’t think about the listing wording after that. Next time, though, I will insist on any misleading fluff words being removed.

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  1. Anonymous Blog Discusses the Neighborhood Effect | Jubally Solutions
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