I like to poke around HAR and get an idea for various areas of Houston. I have no real estate training but am generally curious to follow trends. What I don't understand is the relationship between tax appraisal and so called market price.

I found a house that is listed for 120k over the 2017 tax appraisal. House was renovated early 2016. The 5 year tax appraisal trend shows an increase in value up to 2016 and a decrease of nearly 2.5% in 2017. So with renovations in 2016 the county saw a reduction in value? How does that make sense? Additionally, how does that correlate to the list price being that much greater than the appraisal? Obviously, there are certain features that drive the market price one being waterfront.

Tax appraisal should be the value at Jan 1 of tax year.
Because of homesteads limiting the cap along with other factors such as over 65 etc etc. the tax appraisal then starts to lag behind mkt value. Mix that with some parts of town doubling in price almost over 3-5 years and you can see how it gets skewed.

CAD values have no true influence on price. CADs also do a very very poor job w remodels. I bought a house for 110k and put 40k in recently. At the time I bought it the prop CAD value was 117. Now it is 108k even though appraised value for a refi was 210.



The idea like jmazz said is to minimize that every year bc your "asset" is really a liability.

Ya I get confused at times too.
There is the regular county appraisal and market value.

I'm about to sell in a pretty hot market north of FW. My tax appraisal is like $370k, but market value is $400-$430k.

Remind me, will mortgage companies only lend the appraised value? Or will the consider the market value?

Tax appraisal and mkt value appraisal as part of the sale are not related.
My tax appraisal was 330
I sold at 525 and it appraised.

Yes, correct.
But in your case, if the buyer had a 3rd party come and appraised your home and they came up with $450k, would a bank still lend the buyer the $525 or only do a max of of what the 3rd party appraised it for?

If the lender only provided what the 3rd party appraisal determined, then the buyer would have to pay out of pocket for the difference....I though.

A bank loans off of the appraised value or sales price, whichever is less. Important to note that the appraised value is determined by a 3rd party, licensed appraiser. It is not the tax assessed value that is used as the appraised value. If a property under appraised during the sales process, the difference has to be made up somehow...the buyer brings $ to the table to cover the difference, the seller lowers the sales price to match the appraised value or a combination of similar things can be done.

jmazz said:

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A bank loans off of the appraised value or sales price, whichever is less. Important to note that the appraised value is determined by a 3rd party, licensed appraiser. It is not the tax assessed value that is used as the appraised value. If a property under appraised during the sales process, the difference has to be made up somehow...the buyer brings $ to the table to cover the difference, the seller lowers the sales price to match the appraised value or a combination of similar things can be done.

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This

Tax appraisals are worthless.

thanks guys. appreciate the commentary.

Ragoo said:

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I like to poke around HAR and get an idea for various areas of Houston. I have no real estate training but am generally curious to follow trends. What I don't understand is the relationship between tax appraisal and so called market price.

I found a house that is listed for 120k over the 2017 tax appraisal. House was renovated early 2016. The 5 year tax appraisal trend shows an increase in value up to 2016 and a decrease of nearly 2.5% in 2017. So with renovations in 2016 the county saw a reduction in value? How does that make sense? Additionally, how does that correlate to the list price being that much greater than the appraisal? Obviously, there are certain features that drive the market price one being waterfront.

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What part of government makes sense to you?

It's the price you get laughed at if you offer it on a house for sale in Dallas at the moment.