Aaron Layman's Katy Texas Real Estate Forum

A Case For Going Solar In Athens - Proposed Property Tax Comes With Threat Of Having Your Electricity Cut Off

The goodies from Greece keep on coming.  Now Germany is pledging renewed help to stave off a Greek default.  After all, a collapse of the European union wouldn't do much for the German trade balance.  In return for aid, Greek cronies are proposing a new property tax which would apply to virtually all electricity-powered buildings.  Nonpayment of the tax would result in having your power cut off.  Needless to say, Greeks are none too happy about the recent austerity proposals.

Is Mortgage Interest Deduction Headed To The Chopping Block?

Interesting discussion of mortgage interest deduction on the heels of the recent debt deal. The "Gang of Six" proposed lowering the limit on eligible mortgages to $500,000 and offering the tax break only to primary residences.  Read the full article at McClatchy.

Debt Ceiling Antics - Who's Really Looking For A Free Lunch In America?

Corporate tax rates of 35% would seem rather high, although as many Americans have discovered, few if any of our corporations pay anything close to those rates.  To get a better explanation for the causes of the stagnant growth in the U.S, it's helpful to glean a little historical perspective.  Large multinational corporations masquerading as "job creators" have outsourced the middle class overseas in the name of higher profitability.  At the same time, our corporate "citizens" have mastered the art of buying favorable treatment at all levels of government, using maneuvers like the 'Double Irish' and the 'Dutch Sandwich' to suit their agenda.

Here's a visual perspective of who's really looking for a free lunch in America...

Is Fort Bend CAD Cherry-Picking Comparable Sales In Violation Of House Bill 1038?

A recent commenter on this site told me about his 2011 Assessment from the Fort Bend Appraisal District which increased roughly 18%.  When he looked at the comparable sales used by the Fort Bend CAD for the inflated assessment, he pointed out there was a recent foreclosure right next to his home which wasn't included as a comp.  Apparently the CAD representative refused to include this foreclosed property as a valid comparable sale.  That's rather interesting since House Bill 1038 (effective January 1, 2010) specifically states that the chief appraiser (appraisal district) may not exclude distressed sales from consideration when assessing residential property in Texas.

I did some checking, and there were actually several foreclosure sales of comparable size within this particular subdivision within the past 9 months.  Quelle Surprise: not one of those foreclosures appeared on this gentleman's Fort Bend CAD assessment report.  Homeowners in Fort Bend County are encouraged to read the full text of House Bill 1038, section 23.01 of the Texas tax code, prior to attending their property tax protest hearing.

Attorney David Showalter is currently investigating the issue regarding possible exclusion of distressed sales at the Fort Bend CAD.  If you have an experience where relevant distressed sales are not being considered in your Fort Bend Appraisal District Assessment, I'm sure Mr. Showalter would be happy to speak with you.

Preferential Treatment At The Fort Bend Central Appraisal District? - Analysis Of Assessment Data For Fort Bend CAD Supervisors & Board Members Raises Questions

I visited the Fort Bend Central Appraisal District yesterday in what has become an annual ritual of protesting my Fort Bend CAD assessment. It's no secret that with shrinking budget revenues, county appraisal districts across Texas are under the gun to generate additional funds where ever they can. So it came as no surprise to me when my 2011 property tax assessment jumped. What I didn't expect was that it would increase by almost 19 percent. That's a spectacular gain even for the Katy market.

My informal hearing yesterday was interesting to say the least. The Fort Bend CAD appraiser performed the usual song and dance and told me that the comparable sales for my 2011 assessment suggested a sizable increase in the value of my property during the last twelve months. I quickly pointed out that the comps he was using didn't have the same number of bedrooms or bathrooms, and they had larger garage spaces. He was not deterred by my argument and took my paperwork to his supervisor for review. Apparently she didn't agree with my assessment either, so my case was sent to board review. I'll be going back in two weeks for a little more entertainment at the Fort Bend Central Appraisal District.

Looking at the comps Fort Bend CAD used for my 2011 assessment raises some questions. Four of the five comps in my case show lower 2011 assessed values than the sales price data reflected in the CAD's own comparable sales report. That suggests that the values they are using for sales comps are inflated before you ever get to the point of making adjustments. I guess if the CAD needs higher numbers, they can pick the values they choose as a starting point. The Fort Bend CAD senior appraiser I spoke with said the comps selected for the assessments are chosen by the computer. I can only assume that would mean the Orion software package utilized by the Fort Bend CAD.

The discrepancy in the data utilized with the Orion software package is more than a little puzzling, but I really don't expect much from the CAD in terms of accuracy in determining market values for real estate. What I do expect is to be treated fairly as a homeowner.

That got me thinking about the staff and board members at the Fort Bend CAD. What's happening with their property values? Well as it happens, they are apparently lower than they were two years ago. Since 2009, Fort Bend CAD Supervisors and Board members apparently saw a net decrease of over $125,000 in their own property assessments. To be fair, it appears there was an $83,000 cumulative jump in value from 2010 to 2011, but the two-year decrease of $125,000 is more interesting.

Just looking at the records of the two supervisors and four board directors I located, Fort Bend CAD data indicate a net decrease of over $76,000 in their cumulative assessments from 2009 levels. Of those 6 records, only two showed an increase in value from 2010 to 2011, and only one showed an increase in value from 2009. Interestingly, the supervisor who sent my case to board review apparently saw her assessed property value drop by roughly $8000 compared to the 2009 value.

A look at the 2011 Board review members also shows some interesting figures. There is the usual assortment of retired, over-65 exemptions that you might expect, as well as a few Ag exempt parcels of acreage which I'm sure are producing plenty of produce and timber for the benefit of Fort Bend County residents. Nonetheless, it seems even the board review members as a group received a net decrease of over $25,000 in their assessments from 2009 levels. Coincidence? I think not, but you be the judge.

Untapped Resources - A few years ago when visiting the Fort Bend CAD, I informed a CAD appraiser of several hundred thousand dollars of un-assessed real estate. The real estate in question happens to belong to a professional NFL athlete with a luxury residence in a gated community in Katy. Interestingly enough, the 2nd story of his 5519 square foot home is erroneously listed by the Fort Bend Central Appraisal District at 788 square feet, the same size has his garage. The 2011 preliminary value for the home is listed at $546,130, benefiting from the almost 1600 s.f. of invisible improved living area. The same floor plan at the end of the street has a 2011 preliminary assessment of $866,120. That's a great deal. It's also an error by the Fort Bend CAD that could have easily been corrected.

Fort Bend CAD Sued By Homeowners in 2010 - Several Richmond area homeowners sued the Fort Bend Appraisal District last year for failing to follow state law prohibiting the exclusion of foreclosures in determining assessed property values. Attorney David Showalter questioned the CAD's comparable sales used for assessment purposes claiming they inflated values. New Texas Law under House Bill 1038 prohibits chief appraisers (appraisal districts) from excluding foreclosure sales as comparables for property tax assessments. Effective Jan 1, 2010...

HB 1038 requires an appraisal district to include comparable foreclosed and distressed homes when valuing a residential homestead.

HB 1038 directs appraisers, when valuing a homestead, to consider the value of properties that were foreclosed upon during the prior three years and were comparable to the homestead at the time of the foreclosure sale. Appraisers also must include those distressed homes whose value has decreased due to a declining economy. To be comparable, these foreclosed and distressed properties must be in the same neighborhood and have similar relevant characteristics.

I would encourage you as a homeowner to do your own research and ask your own questions. These are merely my own observations of unequal appraisal at the Fort Bend Appraisal District. If you have an experience with the Fort Bend CAD that you would like to share, please post in the comments section noted below.

Big Fat Giant Disclaimer! - I do not guarantee the accuracy of the information you see here in this post. Data was compiled from the Fort Bend Central Appraisal District website. Property records were matched with names provided by CAD staff or personal observation, research.

Katy TX Home Values Up 19% in 2011 - Or Why Fort Bend Appraisal Assessments Are Still Off The Mark

2011 Preliminary Assessments are in at the Fort Bend CAD, and the assessment values continue to be all over the map. According to the Fort Bend Central Appraisal District, my home's value shot up almost 19% during the last twelve months. That's a rather impressive gain, particularly for an area that has seen actual sold home prices essentially flat for the last three years. But the fun doesn't stop there at the Fort Bend CAD.

On my street alone, the assessment values vary by almost $20 per square foot for homes constructed by the same builder during the same year. In property tax terms, that's known as unequal appraisal. Unfortunately, it's nothing new with the mass appraisal system utilized at the Fort Bend CAD, and other CADs across Texas. I've written about the many errors in this system before, but it appears Fort Bend CAD is at it again with 2011 preliminary assessments.

If you have experienced an unwarranted increase in your 2011 property tax assessment from Fort Bend Central Appraisal, you are welcome to share your experience by posting in the comments section. Don't forget to protest your assessment if you feel it is overstated. Once you receive your 2011 assessment in the mail, you can use the ID with your account information to protest online. You also have the option of filing your Fort Bend County Appraisal protest in person or by mail.

I would recommend you visit the CAD in person to file your protest through the informal hearing process. It's one thing to dismiss a homeowner's claim through a computer-based system. It's a little more difficult to look someone in the eye and deny them the same fair treatment you might be receiving as a CAD employee or board member.

Texas Attorney General Settles Case Against O'Connor & Associates For $800,000

The Texas Attorney General's office has reached an $800,000 settlement with property tax consultant O'Connor and Associates.  The AG's office has issued a consumer alert advising homeowners that O'Connor must implement multiple changes to its business practices, and the company is prohibited from filing tax protests without property owner's consent.

Although the case against O'Connor & Associates was settled and associated claims under the Texas Deceptive Trade Practices Act have been released, I found a few interesting details in the final judgement.  The Agreed Final Judgement and Permanent Injunction specifically prohibits the company from engaging in various deceptive business practices.  O'Connor is now prohibited from using any website address which includes the name of any appraisal district in the domain, including and not limited to "subpages" of the defendant's  website.

Page 7 of the judgment relates to terminations of O'Connor's service agreements and allows for "any reasonable means of communication, including fax, email, and regular mail", noting the agreement shall be terminated effective on the 30th day after the company receives notice of termination.  Homeowners should be aware they will also need to contact their relevant appraisal district to revoke any Appointment of Agent form on file with the CAD if they want to represent themselves.

Protesting your property taxes is not that difficult, and many Houston area homeowners now have the option to file their property tax protest online.  If you need relevant comparable sales data for your protest, your Realtor should be willing to help you.  If a company offers to handle your protest on your behalf in exchange for a fee, it's wise to read the fine print.

  

Fort Bend Central Appraisal District Pushes Assessments Higher In 2010

Appraisal notices arrived in the mail for most Katy, Fort Bend area home owners this week.  That means higher property tax bills and continued appraisal creep this year.  My clients have already started requesting data to protest their 2010 Fort Bend Assessments.  If you used a good Realtor when you purchased your home, he/she will be happy to provide you with this data.  The protest period for Fort Bend County runs from May 1st through June 1st this year.  Just fill out the notice of protest and take your case to the Fort Bend office located at 2801 FM 2218 in Rosenberg.

Fort Bend CAD is supposed to be rolling out an online protest option this year.  That will likely lead to an increase in protest volume.  If you can't access the system, you can always go to the CAD office in person.  You do not have to wait for an appointment for your informal hearing.

While the Fort Bend chief appraiser recently noted that land values are down 2.74 percent this year, don't let that fool you into thinking that assessment values are down.  The CAD doesn't care about the breakup of your land and improvement values.  They are only interested in the total value of your property.  From initial data I have seen, it appears assessments are jumping across the board.  It's also worth noting that your 2010 assessment is supposed to be reflective of the value of your property in January 2010.  That doesn't seem to stop the CAD, however, from pulling bogus comparable sales which may be a year or two old. 

The mass appraisal system utilized by the CAD is anything but perfect, so it's likely you may have a case for protesting your assessment.  One of the more common errors I've noticed on the Fort Bend CAD is an overstatement of the square footage of improvements.  Ask the CAD to show you their paperwork on how they arrived at the size of your home.  If the CAD has the number of bedrooms or bathrooms in your home misstated, ask to have the information corrected.

Don't forget to file your protest before the June 1st deadline.  If you are concerned about appraisal creep and ever-increasing property tax burdens, contact your state representatives and voice your concerns.

Texas Attorney General Charges O'Connor & Associates of Violating Property Tax Code and Deceptive Trade Practices Act

Texas Attorney General Greg Abbott today accused Houston-based O'Connor & Associates of falsely representing thousands of taxpayers and failing to perform work it was hired to perform.  According to the AG press release, O'Connor is charged with failing to appear at hearings for customers, filing tax protests without taxpayers' knowledge or consent, and submitting fraudulent appointment of agent forms.  You can read the entire press release and view media links here:

http://www.oag.state.tx.us/oagNews/release.php?id=3004

If you have personal experiences, comments regarding O'Connor you may post to this article.  If you feel you have been a victim of fraudulent business practices you should contact the Texas Attorney General's office at www.texasattorneygeneral.gov or call (800) 252-8011.

A visit to the Houston area Better Business Bureau http://houston.bbb.org shows that O'Connor & Associates currently has an "F" rating.  The number of complaints, failure to respond to complaints, and number of complaints that were not resolved are listed as reasons for the poor rating.  Of the 92 complaints processed by the BBB in the last 36 months, 11 were still unresolved.

Remember that as a Texas property owner, you have the opportunity to protest your property taxes yourself for free.  It is not necessary to hire a third party to do it for you.  A good Realtor can assist you in collecting data for your case.  I help a number of my clients every year with their tax protests, free of charge.  When I say service after the sale, I mean it!

2009 Ft Bend Central Appraisal District Assessments Expose Flaws In Mass Appraisal System

I visited the Fort Bend CAD office today to get my informal hearing out of the way.  After talking to one of my clients yesterday about his experience at the Fort Bend CAD, I was curious to see how the appraisal district tagged my property with a grossly inflated value.  My client's experience yesterday was unproductive, as the appraisal district representative told him that the comps in the "system" were not justifying a reduction in his assessment.  After looking at the comps Ft Bend tried to use, I can understand why!  Two of the comps used for my client's assessment came from 2007, and one came was from the first quarter of 2008.  Any licensed fee appraiser would be thrown out with the bath water for trying to use this irrelevant data.  Of the 5 comps my client showed me from his interview, only 1 would hold water as a relevant comparable sale for an arm's length purchase transaction in 2009.

My experience today started much the same, but ended with different results.  The preliminary comps used by Ft Bend to appraise our home were also irrelevant.  Three of the four comps I was shown were more than 6 months beyond the January 1st 2009 date when the appraisal district supposedly appraises your home.  Using dated sales does not take into account changes in market conditions which started in the last quarter of 2008.  All four of the supposed comps were at least 1600 square feet larger than my home with more bedrooms and/or bathrooms.  Two of the four comps also had swimming pools, where ours does not.  To use larger homes as comps, FB CAD should make the appropriate value adjustments based on differences in size.  If they did that, our assessment would have to drop significantly.  Real fee appraisers look at comps which are similar in size, and if the comp requires an adjustment of more than 15%, it is normally thrown out. 

After arguing my case with the my interviewer today, we were able to reach a formal agreement on a reasonable assessment for my home.  Fortunately, I was prepared to substantiate my case.  Some homeowners may find the Ft Bend CAD less willing to negotiate.  If you feel you have a valid argument, I encourage you to make the trip to Rosenberg.  Be sure to ask for a copy of the comps that Fort Bend Central Appraisal used to arrive at your preliminary value.

If the Fort Bend Central Appraisal District representatives don't seem interested in using relevant comps , you may also want to ask your interviewer and his/her supervisor to show you their own current assessments.  I obtained a copy of the members of the 2009 review board today on my way out.  I think it would be prudent to analyze the assessments of the Ft Bend CAD staff/review board to see how their own assessments compare to that of their neighbors.  I would like to know for certain that the people in charge of determining the taxable value of our property are not benefiting from the same flawed system they are trying to implement.  We might also need to look at the property of some our other Fort Bend elected officials.

Stay tuned!