Exactly. My main question then is, should I chalk it up to the informal setting, and reasonably expect to have some success in the formal.

NCNJ1217 said:

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Exactly. My main question then is, should I chalk it up to the informal setting, and reasonably expect to have some success in the formal.

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who knows. I've lost faith with the formal after a futile exercise last year.

NCNJ1217 said:

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1. Should I reasonably expect my value to be lowered correspondent with the square footage that was reduced?

Yes. Value is based on square footage.

2. If the answer to #1 is yes, should I reasonably expect to add that reduction to the amount of the 2016 sale on the HUD-1?

No.

3. If the answer to #1 is no, why not?

If you purchased the house in 2016, that purchase was based on the actual square footage. You should expect HCAD to match the value from the HUD statement. Don't think I have ever heard of someone getting their value reduced below HUD less than 1 year from purchase unless they had proof of damage, extreme drops in market after closing, etc... They will fix your square footage but won't reduce below HUD because their records were wrong. Probably should have held on to that fact for next year.

4. Do they just not trust the informal appraisers to do math? I had it all laid out as far as how much to subtract to account for the lowered square footage, but perhaps they don't allow them to do those calculations in that setting?

Informal guys have some limitations on what they are allowed to do. Logic be damned they are just not allowed to give you adjustments for certain scenarios. However, based on the info you provided, he may have been in the right not to adjust. If you purchased last year, the purchase price is your value. Highly unlikely you get it any lower until next year.

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Then I brought out my HUD-1 from last year's purchase which showed a purchase price lower than appraised value, and further, that showed a seller contribution to bring the price down further. After he checked with a supervisor he came back and said they could accept the sales price with the seller contribution in the informal, but they might not accept it in the formal. (I think he was blowing smoke because it's the law that seller contribution factors in.)

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This should have been your entire argument this year. Use the HUD to get your value lowered. Worry about square footage next year. You already have gotten the square footage fixed in their system, correct? If so, focus your efforts on the HUD in formal. Should be a slam dunk. To be safe I would find supporting documentation showing that seller contribution has to be factored in to value by law. Only whip that out if you have to.

Thanks. I'll give it my best shot in any case.

Easy. Ask if your home was 1 sqft, would the value of it remain the same?

Just went to informal because I needed to be on 290 this morning anyways and wanted to hear what they had to say.

They said my SF was $10 higher than my neighbors because I have stucco vs their partial siding. I may go ask some people down the street for their repair quotes for stucco before the formal.

Also said I couldnt argue a settled amount on a house with HCAD only a valuation.

I wasn't expecting anything at informal, but it gave me a little information to look into.

I couldn't argue sales as they are all $100k over what my appraised value is.

Bondag said:

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Also said I couldnt argue a settled amount on a house with HCAD only a valuation.

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I've heard this before, but it still sounds like total BS. The settled values should be considered more accurate, not the WAG that HCAD starts you out at. Surely one side or the other has to be supported by law, right? Anybody know?

YellAg2004 said:

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Bondag said:

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Also said I couldnt argue a settled amount on a house with HCAD only a valuation.

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I've heard this before, but it still sounds like total BS. The settled values should be considered more accurate, not the WAG that HCAD starts you out at. Surely one side or the other has to be supported by law, right? Anybody know?

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I think there is case law that backs up the notion that settled values are legitimate but good luck getting the "don't cares" at HCAD to admit that.

HCAD employees don't like using settled values to drop you. They will use it against you though. If you end up at formal, those guys will use anything that seems plausible. You may have issues arguing that if sales comps are higher. HCAD is gonna hit those sales comps hard in informal.

Had my informal today and the appraiser agreed with Jubally price (he just rounded it up by $23 so it was an even number). We got lucky...a nice appraiser, I stuck to the facts, use U&E to discuss my point and followed up with my foundation repair quote showng $5k worth of needed work.

Sucks that the informal really depends on the attitude of the appraiser...agree with the instructions of "you catch more flies with honey."

Something interesting to note was the appraiser immediately recognized the report. He called it "some software we've been seeing more of this year" but also agreed it was pretty correct in comps. Im curious to see if HCAD pivots or does anything different down the road in response to Jubally

Doubt they will. O'Connor had a bazillion more clients than we do, and if they haven't tweaked their system to run him out, I doubt that do to us.

Settled values = Go look up HCAD vs Duncan 1997.

What did you ever figure out? Similar situation here- slowly executed needed remodel from 2014-2016. HCAD jumps me up 43% for 2017. I missed the informal resolution process and ended up straight ARB formal hearing (regrettable accidental mistake as the informal provides another opportunIty for a voice of reason). The ARB appraiser went straight to the usual market jargon and the three panelists (three sweet older ladies) just domino'd right on cue agreeing with the appraiser with only slightly different numbers, as though they were independent thinkers, in complete disregard for my homestead rights. Tax code says ONLY way value can increase by more than 10% per year, if homesteaded, is if additional Improvements are made to the property (Section 23.23). An improvement is clearly defined in the General Provisions of the Property Code as a new building, structure, fixture, or fence. And in that event, ONLY the value of that "Improvement" can be added beyond the maximum 10% increase. And further, none of the above can ever exceed a market value. HCAD and ARB decided in my ARB hearing to completely disregard homestead rights with the Appraiser actually making the statement that since I have made renovations they are entitled to "re-appraise" my property to a full market value. I have been unable to find anything close to granting that authority. I am forced to appeal at State level by providing a $1,000 deposit to set a formal hearing date and am looking forward to what I hope is a real hearing. With such a high tax burden at risk, I will be lawyering up for next stage.

Had my formal hearing this morning, used U&E argument with Jubally documentation. HCAD didn't budge from original market value, 3 person panel only went down to my sales price from last year. Oh well, it was a learning process and I will know what to look for next year.

Yeah, based on what I've read for the most part if you had a good informal adjuster he'd work with you. If you went to formal they didn't listen for squat.

htxag09 said:

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Yeah, based on what I've read for the most part if you had a good informal adjuster he'd work with you. If you went to formal they didn't listen for squat.

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I had the opposite. Informal took a hard stance. Formal sided with my argument and gave me a better than expected adjustment.

Cru, have my formal today and just ran the report. On the Jubally U&E chart, the last comp is deemed "Econ Misimprovement" for the Remodel. This property's Imp. Value /sq ft. is stupid low at $9.08, but the Econ Mis. remodel is valued at $69k w/ a .3 factor and brings the Adj. Imp. /sq ft. back in-line with the other comps.

It's not one of the 4 remodel levels. Do you have a resource showing .3 as the factor for Econ Mis.? The property itself is a remodel + extension and looks like a nice house on the comp. page!

I know I can still argue it with the formulas and factors - but just want to make sure I can back-up the 0.3.

Cru can chime in, but this has come up on a few other boards I read. You may have already seen this but this is their rationale:

In areas where older houses are being torn down to make way for new construction, the contributory value of the building to the total property value is diminished. We use the 'Econ misimprovement' as an adjustment to the dwelling to limit the remaining building value as the land value increases.

Sounds like they're saying that remodeling the home isn't the highest and best use of the property and you're basically adding no value because land value will still prevail. Not sure if that is the case in your area.

I did find that Google'ing.

This is in OF, so that's definitely the narrative. But it's a weird comp.

Their Market Improvement is $19,364. Running it through the Adjusted Improvement Value formula w/ 0.3 factor changes that to $88,172. I just can't find any reference to 0.3 being correct.

I've re-calculated the Median Adj. Value /sq ft. w/o that comp and the other nine are still strongly in my favor. If it comes-up, I'll just ask them to ignore it.

Edit: how do you get classified as Econ Misimprovement? This house is same age as mine, complete remodel + extension, one street over and market appraised $70k less.

if you email me the address of the comp, I'll take a look

scottrose@intownhouston.com

Sent.

chjoak said:

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NCNJ1217 said:

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1. Should I reasonably expect my value to be lowered correspondent with the square footage that was reduced?

Yes. Value is based on square footage.

2. If the answer to #1 is yes, should I reasonably expect to add that reduction to the amount of the 2016 sale on the HUD-1?

No.

3. If the answer to #1 is no, why not?

If you purchased the house in 2016, that purchase was based on the actual square footage. You should expect HCAD to match the value from the HUD statement. Don't think I have ever heard of someone getting their value reduced below HUD less than 1 year from purchase unless they had proof of damage, extreme drops in market after closing, etc... They will fix your square footage but won't reduce below HUD because their records were wrong. Probably should have held on to that fact for next year.

4. Do they just not trust the informal appraisers to do math? I had it all laid out as far as how much to subtract to account for the lowered square footage, but perhaps they don't allow them to do those calculations in that setting?

Informal guys have some limitations on what they are allowed to do. Logic be damned they are just not allowed to give you adjustments for certain scenarios. However, based on the info you provided, he may have been in the right not to adjust. If you purchased last year, the purchase price is your value. Highly unlikely you get it any lower until next year.

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Quote:

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Then I brought out my HUD-1 from last year's purchase which showed a purchase price lower than appraised value, and further, that showed a seller contribution to bring the price down further. After he checked with a supervisor he came back and said they could accept the sales price with the seller contribution in the informal, but they might not accept it in the formal. (I think he was blowing smoke because it's the law that seller contribution factors in.)

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This should have been your entire argument this year. Use the HUD to get your value lowered. Worry about square footage next year. You already have gotten the square footage fixed in their system, correct? If so, focus your efforts on the HUD in formal. Should be a slam dunk. To be safe I would find supporting documentation showing that seller contribution has to be factored in to value by law. Only whip that out if you have to.

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So my formal was today. The building was a ghost town. I imagine everyone else rescheduled.

I mainly argued U&E using the Jubally report. Then I walked the panel through the sqft decrease (made during the informal) that already showed up in their system. Finally, to leave no stone unturned, I did alert the panel to my 2016 sales price minus seller contribution (which was lower than HCAD's value) and let them know, this is not the basis of my argument, but the value that comes out of this meeting definitely can't be lower than this. So basically I ended up arguing all angles.

The appraiser and the panel members all whipped out their calculators and did calculations separately and all somehow came up with different values. They also calculated different values for U&E and comparable sales. The lead panel member reminded everyone that the lowest value would be the one they used, i.e. Since the U&E is lower, we aren't going to use the recent sales price. So, discussing my 2016 sales price did not hurt at all in the end.

My appraised value ended up being dropped over $30,000, a combination of the U&E argument and the square footage difference, which I did end up getting credit for in the current year.

Really surprised they didn't just take the 2016 sale price and end the meeting. Seems to have been the MO in the past.

I think the square footage adjustment threw everyone in the room off. Including the HCAD representative - he mentioned something like hmm, my comps dont match the square footage, did this adjustment get made after my report was run?, etc. I think they were all calculating how much to take off the price due to the difference.

Also, I was extremely organized and made it very clear from the start that my goal was 1, To protest based on U&E and 2, we need to get this adjusted to match the sqft. The sales price was an afterthought and I treated it as such, but my addressing it could have gotten out in front of the HCAD rep, who would have used it as his main argument.

Well I had my formal today and it is the first time in four years that I wasn't able to reduce my appraisal using Jubally. Interestingly enough, the HCAD appraiser called out Jubally by name, so they must be used to seeing it more often.

People with experience contesting- what is a good % to get lowered?

I contested this year and they lowered appraisal by 8.5% (was going to be raised max). Is that a normal or reasonable expectation?

TIA