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Can I trust the home values at the County Appraisal District value?

Tuesday, June 07, 2011   /   by George Chiriboga

Can I trust the home values at the County Appraisal District value?

Here is another question I have to address constantly with my friends and clients from Houston, Texas: The short answer is no, but I will explain why below.

First of all, you should know that these values are there for taxation purposes only, and they are only done once a year.

Second, in Houston, there is a difference between market values and tax appraisal values. In theory, they should be the same but it is absolutely impossible for the county to visit every neighborhood in the county, go inside each home to check its condition, and generate at least "three" comparable solds for each property.

Third, the counties around Houston base their appraised values on budgetary reasons for the year. That means, the counties establish a budget for the year, decide the increase in taxation needed to meet the budget, and then generate the increase in tax rate applicable to all the properties in the area. Then if the increase was too much for a homeowner the burden of proof is in the homeowner to show the counties that they made a mistake.

Fourth, Texas is a nondisclosure state. That means that when you buy your home, you don't need to tell the county how much you paid for your home. Texas is still a free country and they can not force you to reveal that. So when they ask you how much you paid, it is up tp you to disclose that.

Fifth, some uninformed homeowners in Houston (or surrounding suburbs) don't dispute their increase in taxes under the belief that the market value is rising, not realizing the only true thing is that their taxes are increasing. On the other hand, there are some savvy homeowners that make use of very depreciated data and pull the values down based on low sales in the neighborhood.

Sixth, market values in Houston, like gasoline prices, are determined by actual supply and demand (higher in the Summer than in the Winter). It is established when a buyer and a seller come to a meeting of the minds, sign a purchase contract, and the transaction actually closes.
For that reason, lenders rely on Texas' licensed appraisers to visit the property, check the upgrades, and study at least three actual solds in the area for the last three months, six months but no  more than 12 months. After that is done, they will prepare a 10-page report that includes as an addition how much it will cost to rebuild that property. Therefore, draw your own conclusions.
Next time, ask your Houston REALTOR to study actual sold values in the area for no more than 12 months and you will have actual market values.
If you have more questions, please do not hesitate to Email us or contact us at 713-589-3234 for more information.