Which are the Most Over-Taxed Houses in Zip Code 77396?

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? Since HCAD is not able to physically inspect the subject property in person, this limits the quality of their data.

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. This applies to Harris County Appraisal District and most other appraisal districts.

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%. Most home owners have no idea that such a large number of houses are over-taxes.

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. If Harris County Appraisal District would make updating the records part of the appraisal process, it would reduce the number of annual protests.

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 77396. 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

77396

17535 Crestline Rd

165%

$96,286

$58,500

American Real Estate Investments LLC

77396

14602 Logan Falls Ln

140%

$429,956

$306,799

Davis Jason D& Lea N

77396

14607 Sutter Creek Ln

131%

$373,311

$286,000

Lentz Rebecca J & Chris

77396

14606 Logan Falls Ln

130%

$408,097

$315,000

Punwasi Krishna

77396

3638 Village Grove Dr

127%

$102,364

$80,751

Englehardt Steve & Vicki

77396

7034 Pinetex Dr

126%

$63,169

$50,000

Champion Mortgage Company

77396

5926 Boness Rd

125%

$99,708

$80,000

Cruz Heleodora G

77396

14307 Heidi Oaks Ln

123%

$756,567

$615,099

Proctor Shermin V

77396

4755 Butterfly Path Dr

121%

$211,187

$174,000

Orellana Jacqueline

77396

11431 Sandstone Canyon Dr

121%

$126,977

$105,000

Dinh Coi

77396

14711 Banner Ridge Ln

119%

$352,188

$297,000

Rose Kara L & Brian L

77396

14906 Peachtex Dr

118%

$103,089

$87,500

Diaz Rene

77396

9910 Krone Ct

118%

$194,090

$164,900

Federal Home Loan Mortgage Corp

77396

3023 Sandpiper St

116%

$96,485

$83,000

Dawson Sandra L

77396

7807 Trinity Hills Ln

116%

$505,229

$435,000

Cherry Kristina A

77396

9902 Pennymill Dr

115%

$285,070

$247,046

Demshar Douglas A & Susan M

77396

3622 Beckett Ridge Dr

114%

$143,030

$125,000

Srp Sub LLC

77396

3215 Lauren Oaks Ln

114%

$102,340

$90,000

Adlam Mark

77396

17414 Hayley Springs Ct

113%

$108,234

$96,000

Lita Properties LLC

77396

10510 Harbor Canyon Dr

111%

$99,931

$89,890

Samuel Audrea

77396

6927 Sanders Hill Ln

111%

$262,357

$237,000

Keith Amy F

77396

3614 Liles Ln

111%

$157,063

$142,000

Cendejas Mark D

77396

4726 Red Canna Vista

110%

$182,276

$166,000

Allen Tyler & Cassidy

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 31 is 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). Hence, the deadline occurs almost a year before the home owner learns there is a problem.

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.

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.

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.

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 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.

For more information, contact Charlissa Holman at 713 375 4367 or Patrick O’Connor 713 822 8613

Patrick C. O'Connor has been president of O'Connor & Associates since 1983 and is a recipient of the prestigious Mai designation from the Appraisal Institute.