Tax Appraisal Hearings

Today we had our formal Tax Appraisal hearing. When we received the notice of our tax assessment, it seemed a little high, and a short review of the comps proved that feeling to be true.

There are a few things I learned through the process that are important to share with all of you living in the Austin area, so I figured what better way to let y'all know than to put it here. Ok maybe I want to brag a little too! ;)

The first step in the process is to send a letter to TCAD to let them know you intend to appeal the assessment. You will then get a letter in the mail informing you of the date and time of both your informal and formal hearings.

It's a great idea to go to the informal hearing. The first question we were asked in the formal hearing was if we went to the informal. Unfortunately we were unable to attend the informal at the time originally specified by TCAD. Thankfully, if you are unavailable, you can still go in through the "walk in" process. We chose to get there first thing on a Monday morning. To prepare for the informal, I printed out our tax record, along with 5 sales that helped support our case that our property was assessed higher than it should be. The guy that did the informal review was a nice fellow, but unable to assist us in any meaningful way. The cool thing was that he just up front about telling us that.

The most important thing that I learned during the informal process is that the time frame for the sold comp data that is allowed is ALL of 2008, and January and February of 2009. In the class I took three weeks ago we were told the time frame was three months before and three months after January 1, 2008. Big difference!

So back to the drawing board...I went back in to the MLS and pulled new comps using the date range that the informal hearing guy shared with us. Thankfully there were plenty within a block or two that supported our case (even better than the original ones I had pulled using the wrong time frame).

We arrived for our formal hearing (one week after the informal) and waited to be called in. We watched three individuals all leave from different rooms with looks of anger on their face. One of them even mumbled "what a bunch of idiots" as he came out of one of the rooms. I was worried when that was the room we were called in to!

So we went in, were introduced to the three person Appraisal Review Board and the single TCAD employee, and were then sworn in. I shared the five new comps that I brought in to support our case, and gave a brief explanation of them. Luckily I had been involved in two of the five sales, so I had a little credibility as an "expert" in the area.

Then the TCAD employee went through the various ways TCAD used to support the value that we had already been assigned. After that, he took my five comps and used three of them as comparable information. Why three? Because he threw two of them out as "bad comps"....more on that later.

When he put the new comp information in, our case was supported. The arbitration board motioned that the new assessment be XYZ, seconded, and approved the motion. We won!

Here's what I learned that surprised me a little (in addition the the new time frame for comps)
1- the TCAD appraiser said that any sale that had been on the market less than ONE YEAR was a "short sale" and should not be counted (yes, his definition of short sale is different than a banks definition of short sale..and different than most peoples idea of short sale as well)
2- the TCAD appraiser said that any foreclosure listing could not be counted. Although I had MLS documentation in front of me that said all of my comps were non foreclosure listings, he seemed to think otherwise on one of them and would not change his opinion
3- the comps must be not just in the neighborhood, but within 1-2 blocks of your home to be "accurate" comps. That is slightly different than the area an actual appraiser
will use.

We had some interesting conversation, and I was really wanting to tell him what a nut he was, but was quite confident that wouldn't help our cause. He asked me how long I had been in the business, and when I responded "5 years and one of my major clients is Fannie Mae" he chuckled and said he had been doing this for 20 years. Neat.

Then he went on to say the average time a property on the market in our area was 1 year. Had I known that was his position I would have brought statistical documentation for the past 10 years to prove that he is simply wrong. Unfortunately we didn't have a heads up on that opinion....and I'm not sure he would have paid any attention to the stats since he's been doing this for 20 years and clearly knew everything.

Anyway, thankfully the Appraisal Review Board participants had brains and had them engaged. I was very happy with the outcome, and even happier when one of them said "great job proving you case, guys"....I wanted so bad to wink at the TCAD guy...but again...what's the point.

So... when you're ready to fight your tax appraisal, be sure the comps come from 2008 plus Jan and Feb of 09, be sure none of them are foreclosures, and be sure they are within 1-2 blocks of your property. You may find it useful to bring Days on Market data for your area as well, just in case you need to prove that ONE YEAR on the market is not average in Central Texas. Need help pulling the info? Just give me a call and I'll be happy to help.