The Path To Fair Valuations?
I really dislike the Travis County Appraisal District’s valuation process, and the market values in Mueller have been raised an outrageous amount for 2011.
Why don’t I like the process? It’s somewhat complicated for the layperson in my opinion. It often seems from the outside that TCAD raise the value of everyone’s home and some people will complain and protest the valuation – some won’t. Some of those people will have the tools, time and skill to take the appraisal districts data and make a concrete argument to reduce their valuations. Many people either won’t bother or won’t succeed, and they become the equity comparables which everyone’s homes are compared to.
I’d posted an offer to help folk in Mueller, Austin protest their valuations and a few folk took me up on it. Next year, I think we’ll be better having some kind of community meeting where we all share data and techniques. Of course some people don’t have time for this and use a professional service – according to the community site Texas ProTax and Real Appraisal Relief did a good job for some neighbors.
So one friend called up and we took a look at the data – his home was valued at around $409k. These are the steps we took to get ready for his formal protest:
- Got a copy of the evidence packet. He’d requested it, but it had never been delivered or emailed. Using TCAD’s own data against them is essential – it’s often very little use coming up with your own approach.
- Got a delay for the hearing – we just didn’t start the process in time!
- Took a look at the sales data. It turned out that all of the comparable sales were in my opinion the worst you could use to justify anything – some were from January 2010 (and remember the value is for 1/1/2011 for the 2011 appraisal) ignoring the December 2010 sales. They also avoided looking at homes bigger than his home – unfairly skewing the results. Some of the data that TCAD had for living space sizes was just plain wrong. It’s worth checking things against their own data. I’m a realtor so this kind of stuff is easy for me. And I have access to MLS sales data too, which puts me at an advantage compared to a regular homeowner. That doesn’t really seem fair to the regular homeowner to me — part of the inequity of data that irks me in the whole process.
- Took at look at the equity comparable data. Again, the homes used were all smaller than my friend’s home. It seems to me that a fair appraisal typically looks to bracket the subject home in smaller and larger homes so that you can interpolate a value, rather than extrapolate a value. I also noticed that there was a huge discontinuity in lot pricing – a $20,000 jump for my friend’s lot where lots marginally smaller didn’t attract this disproportionate premium. The worst thing was that there were larger homes on larger lots valued at significantly less – and these weren’t included in the equity comparable list.
- We did a practice run through of the argument and set the stage. The first time I went through the process, I found it a little intimidating – there are three members of the “jury”, an appraiser and they are all sat behind computer screens. They ask you to take an oath and present your argument and then ask for evidence from the appraiser before asking you for final comments. So we prepared the arguments, and my friend wrote them down in order of importance. I told him to take 5 printed copies with him – one for each panelist, one for the appraiser and one for himself.
- He took it to the formal protest this week and laid out three arguments: unfair equity comparable data used, unfair sales comparable data used and unequal valuations for similar property.
OK, so now the good news. He got his market value reduced from $409k to $366k – an 11% reduction. And, “They actually thanked [him] for providing “such a clear presentation.””.
While this is fine and dandy for my pal, the challenge is with everyone who doesn’t take the two hours to work up an argument and the hour to go and present it. They are the equity comparables that get used for next year. Next year I think we need to mobilize as a neighborhood to level the equity playing field.
One parting comment – TCAD’s idea of market value isn’t generally well correlated with actual market value in my opinion. If you want to get an idea of what your home at Mueller is actually worth get in touch.