I got my property tax notice in the mail today, and I'm starting to think that the County just randomly assigns values to various properties without any rhyme or reason. I just got finished reading a report that said property values for my town were down about five percent. The house next door to mine (which is identical to mine) was abandoned by the owner in January of 2007. It sat on the market for over a year, the price reduced and reduced and reduced again. It finally sold two weeks ago for a price nearly 40% less than what we paid for our home three years ago. Throughout the neighborhood, asking prices are falling. Across the county, prices are falling. Inventory is increasing, houses are taking longer to sell, etc. So I get the tax notice today, and they say that despite falling prices, increased foreclosures, the identical house next door losing 40% of its value over the last year, our home managed to post a nearly 10% increase in value. So, I'm pretty sure the values aren't based on anything. They just pick a number out of a hat and go with it. Considering that even during the boom times when prices were actually regularly increasing, the county thought our house was only going up by 3% in any given year, I can't imagine what financial model they could possibly have that shows a 10% increase in this current market. I figure they'll probably decrease it when I protest, but I hate that they just don't assign a real value based on the current market rather than making me jump through hoops. Rant over.
Mine was raised 40% last year (restricted, so they had to break it up), so I raised all kinds of heck. The property appraising thieves took significant time explaining their methodology to me. In my county, they divide properties up into neighborhoods, then grade them from 1 to 6, where the nicest houses get a 6 and the worst get a 1. Land value per square foot is constant throughout the neighborhood. Home value per square foot is then determined by grade and neighborhood. My house is a 4, and every other house in my neighborhood that's graded a 4 will be valued the same per square foot. They get the values from houses sold in that neighborhood during the previous year.
The whole property tax cut myth is such a joke here in Texas. Great rates went down a bit, but valuations went up more, and how long before the rates start inching up again? We built a commercial property that opened this past April. Got my property tax appraisal. For how much? 50% more than it cost me to build! Thats f'in sticker shock.
I have been told by many people, that if it is a new property, especially a personal home, you can take a notorized copy of your closing statement and they will almost always automatically lower to that value that you purchased it for. Especially if it was a non-forclosure, non cash transaction with a normal 15 or 30 year fixed mortgage. (non distressed sale) Apparently it works up to two years after the closing date. I have no idea if it works through the iSettle system.
It was actually the appraisal they gave us the year after we bought the house that made me realize the values were hinkey. We purchased our house in July of 2005. Our neighbors with the identical house bought theirs in February of 2005. They paid roughly 4% more for their house than we did for ours. We would've paid slightly more, but when we were buying the house, the appraisers for the mortgage companies came in with appraisals that wouldn't justify the price we had agreed to. So, the seller comes off the price a little and we buy the house. A few months later, we get the county appraisal that says that not only is our house worth more than we paid (despite the detailed appraisals from a few months prior) but that our house was worth worth what our neighbors paid PLUS 3%. I protested and they reduced the appraisal to the price we paid, but it seemed obvious that they were taking the highest price paid per square foot in the neighborhood, determining that to be the market rate and then adding an arbitrary increase for inflation or whatnot, even though that completely ignored the fact that market prices had obviously fallen during the year. There are six identical houses on our block that were all sold in 2005. All of them were sold after the neighbors who had paid the highest price of all of us. A true analysis of the market and the trend would've acknowledged the timing of the sales and noted that the prices for identical homes fell throughout the year. At the very least, they should've averaged those prices. Instead, they took the highest, earliest price and stuck us all with it (and then added 3%). If I could get the price that the tax office thinks my house is worth, I'd sell it in a second. But given that the identical house next door started out a year ago at a price nearly ten percent lower than the current county appraisal and didn't sell for over a year and until another 30% or so was knocked off the price, I am very skeptical that I could get that (and if I could, I'd really feel like an idiot for not buying the house next door and immediately flipping it for a massive profit).
My wife and I closed on a house on Friday, and our real estate agent told us exactly that. He said that if the value is more than what we paid for the house, we can show them a copy of our contract and they would lower the appraisal...
