Being the obsessive-compulsive accountant type, I diligently put together my protest and evidence for my meeting with the appraiser. My protest for a lower appraisal was based [...]]]> I posted previously about my decision to protest my property tax assessment, and my time to present my case to the appraisal district finally came this past week.

Being the obsessive-compulsive accountant type, I diligently put together my protest and evidence for my meeting with the appraiser. My protest for a lower appraisal was based upon three points:

• Actual sales for comparable properties in our neighborhood in were much lower than the appraisal they provided for our property.
• The appraisal district overrated the condition of our home due to previous foundation issues, cracks in our sheetrock, the need for repainting, the age of the roof, and other factors.
• The area around our neighborhood has seen a major increase in crime after Katrina, with a large concentration of low-rent apartment complexes, several of which have now been condemned and are homes to squatters and criminal activity.

So I went in for my meeting with the appraiser armed with a typed summary of my case, a copy of the previous seller disclosure form and pictures to evidence the defects to the property, the listing of recent sales in the neighborhood with what I thought were the most comparable properties highlighted, and a map showing the number of apartment complexes around us and several recent stories from the newspapers discussing the crime issues and the condemnation of these properties.

So what was the result? I was able to get the appraiser to reduce the taxable value by nearly $28,000, which out here where our tax rate is about 2.52% of the appraised value results in a tax savings of nearly $700! The appraiser used the pictures and seller disclosure I provided along with one of the comps to justify the reduction.

So what lessons did I learn from this experience? Let me share a few:

1. Take the time to do the protest yourself! I used a third party to protest last year under similar circumstances and they were only able to get a reduction of only $7000, and I still had to pay them a commission of half of the projected tax savings.
2. Pictures are worth a thousand words, and probably a few thousand dollars of valuation! Part of my argument was that the condition was overrated, and the pictures I provided definitely helped prove the point. I took about 30 pictures, and the appraiser looked through all of them and retain about 5 for their evidence file.
3. Arguments about the issues in the area did not help. The appraiser dismissed this as justification of a lower valuation on the basis that lower values on this basis would be reflected in the comps.
4. The comps were important, but the appraiser would not consider several of them. At least in Harris County, they would not consider sales that were related to foreclosures or estate sales. The argument was that these are valid comps since they involve a motivated seller, however I would argue that these properties compete with others on the open market.
5. In Texas, house sale data is NOT public information. Realtors can pull the information, however it is not publicly available. However since the appraisal district must provide you all the evidence they had related to your valuation, they will provide a listing of the sales information as part of the evidence package to use in your protest. Because the sales data isn’t public and the appraisal district will provide it to you, I would recommend protesting even if you don’t know what other area properties sold for. There may be great evidence of a lower valuations in the evidence they provide you don’t even know about, and if not you can always just not bother following through on the protest.
6. While the appraiser would consider defects to the structure itself, they would not consider defects to items like the fence and driveways. According to the appraiser, the guidelines for appraisals in Texas do not allow this to be considered.

So overall I am very satisfied with the experience. I spent probably about 12 hours filing the paperwork and putting together and presenting the protest, and that time resulted in a savings of $700. It really isn’t that difficult of a process and I would certainly recommend to anyone pursuing a protest.

Last year I paid property tax at the rate of 2.53% [...]]]> Everything’s bigger in Texas! Especially property taxes! While many tout this state’s lack of a state income tax, the flip side of this is that our property taxes are ridiculous. I guess the government is going to get its money one way or another.

Last year I paid property tax at the rate of 2.53% on the non-exempt value of my home. At that high of a rate, even a small reduction in appraised value can have a big effect on your taxes. That is why I have protested my property taxes for the second straight year.

Last year, I engaged a consulting firm, O’Connor and Associates, to protest the assessment on my behalf. After filling out a questionnaire about the condition of my home and completing a form appointing them as an agent before the appraisal district, they were able to reduce my assessment from around $162,000 to about $154,000, which reduced my taxes by about $25. Unfortunately I had to pay O’Connor a contingency fee of 50% of the tax savings.

While the consultant was somewhat effective, I was left with the feeling that the amount could have been lowered a lot more if something more than a questionnaire was offered as evidence. I also didn’t like having to give up half of the tax savings. So when I saw that my county was offering online protests, I decided I would do it myself this year. It was a simple online form to complete to declare the protest, based on which the appraisal district may choose to make a settlement offer via email. If I don’t like the offer, I can then appeal to the Appraisal Review Board where I can present evidence including photos and comparable sales.

Thinking of protesting? Based on my experience so far, here are my tips:

1. Know the deadlines for protests in your county. You can’t lower your taxable value if you miss the deadline!
2. If you choose to use a consultant, be sure to limit the term of the agency. I didn’t know to do that last year and my notice of appraised value went straight to the consultant.
3. When filing your protest, be factual but don’t be afraid to mention anything and everything that would lower your property value, both inside and out. Do your walls need new paint or does the carpet need replacing? What about those cracks in the driveway? Even if your landscaping isn’t as good as the neighbors, that may be a reason to lower the valuation. Go over your house with a fine-toothed comb and note EVERYTHING you find wrong.
4. Take a look at the appraised value of your neighbors as well, as unequal appraisal is often a fertile area for protests. For instance, my home was appraised at about $58 per square foot while my next door neighbor was appraised at about $57 and the house across the street was appraised at about $53.  For my 2,800 square foot house, the difference between $58 and $53 is almost $14,000 in valuation, which is about a $350 reduction in taxes. While no two homes are alike, it certainly is a powerful argument.
5. In most jurisdictions you have the right to review all of the evidence used to determine your appraised value. Review it and use it. Look for any error and exploit it.
6. Take pictures of any defects. Pictures are much more powerful evidence than a written description.

I will keep everyone updated on the status of my protest.