When Tarrant County tax advisor Chandler Crouch deducted $100,000 of his client’s $900,000 Assessed, it’s a win. But that victory was far less flavorful than the one not long after, when Crouch, also a broker, turned around and sold the home for just under $2.5 million, much to the delight of his client, Also frustrating for tax assessors.

In Texas, sales prices for commercial and residential properties are not required to be disclosed, and appraisers must work with limited data. They clean every source they can – multiple listing services, CoStar, LoopNet.

But reformers like Crouch built businesses around what he called a “completely screwed up” system. In the first year of protest assessments, Crouch filed 1,700 protests to the Tarrant County Central Assessment District. Last year, he hit 28,000, leading the assessment district to say Crouch was “making a mockery of the current tax system.” He intends to make as many as 40,000 protests this year.

In a way, this ambiguity bothers homeowners a lot when their bills are too high, and the uncertainty gives them room to protest lowered appraisals, even those that are more or less the same as the sale price . Crouch, who uses custom-built software to handle the massive amount of paperwork required for tens of thousands of protests, whittled down cases to find the ones he thought needed real work.

“First, we make a low price offer on all properties. If, if they’re willing to agree to a minimum value as evidenced by our evidence, then we’re done,” Crouch said.

But for the vast majority of cases, it’s much simpler.

“They don’t want us to have 30,000 hearings out there,” Crouch said. “They know we have data to back it up, because at one point they said I was bluffing and I submitted 191,000 pages of evidence.”

Ambiguity in appraisals can lead to falsely high appraisals, but more often than not, it creates room for values ​​below what the building actually sells for.

“With property taxes, we’re not trying to come up with an exact value,” Crouch said. “The exact value is a range and all we have to do is determine whether there is data to support a value within that range that is lower than what the assessment area is proposing.”

out of nothing, a number

Judges try to be polite.

“A good basis for appraisal is compensation,” said Brent Nan, chief appraiser for the Hunter County Appraisal District. Every time a property trades, his district is notified and letters are sent to buyers and sellers asking for more details about the transaction.

“As you can imagine, we didn’t get a high response to that,” South said.

With little to go on, appraisers have to get creative to generate their valuations. Often, that means tapping into a reputable real estate data provider, although many in the industry are unaware that appraisers are lurking.

“For what I do, usually the MLS is enough,” says Steve Kahan, an appraiser in Houston who works with mortgage lenders. “That’s where we get most of our data.”

In 2019, the Austin Board of Realtors alleged that the Travis County Appraisal District improperly obtained home sales data from CoreLogic.The Evaluation District later confirmed that it purchased the data from CoreLogic, but argued that nothing wrong With the move. CoreLogic quickly terminated the contract with the evaluation area, but the damage was done.

“Our options are to not list a home for sale or to list a home for sale and reveal the price,” Crouch said.

Hard data, however, remains out of reach for many of Texas’ smaller rural counties. “Particularly for some of our smaller rural areas, the cost is simply prohibitive,” South said.

Commercial real estate tends to have more complex financing arrangements and is not subject to the same listing rules, so there is more leeway. But amid the influx of national investor interest in Texas, appraisers may tap those who don’t understand the state’s system to get more comps data.

“That’s where a lot of their data comes from: shooting at very high values,” says Tony Trahan, a tax consultant at KE Andrews. 80%, this is my document.’”

Assessment districts still face a degree of accountability. Each year, the state auditor general studies the performance of appraisers across the state. Under state law, each county’s assessment district—yes, all 254 counties have their own—must be reviewed at least every other year.

The report compares sales prices disclosed through press releases, publicist brokers or other means to the estimated value of similar properties in each area. The ratio can give us insight into how close the estimate is to the true value.

domino

Real estate valuations have arrived this year, but they’re not looking good for some landlords — especially multifamily landlords.

In Dallas County, the latest appraisals were especially harsh on owners of older buildings, which have seen their appraisals rise less than new construction over the past few years. But this year, the average valuation of multifamily homes built in 1980 or earlier has jumped 36%, according to tax consultancy KE Andrews. Those built in 2011 or later saw a 27% increase—still a wicked increase, but not quite the burn felt by older multifamily homeowners.

Valuations for office buildings rose more modestly. Assessed values ​​increased by 18% for “A+ Grade” office buildings and about 17% for Grade A and B workplaces. Class C buildings, those most likely to struggle with low occupancy and expensive renovations, rose 9.5%.

In fast-growing Collin County, which includes parts of McKinney and Allen as well as Frisco and Plano, multifamily home valuations are up more than 34 percent each year. The worst-hit subset, those built between 2000 and 2010, saw a 41 per cent increase in value, KE Andrews figures show.

Three things are certain—life, death, and taxes—but in Texas, there is one more step after taxes: tax protests. Crouch is an extreme example, but there are tax advisors across the state who specialize in lowering valuations.

“We’re a nation built on a hatred of taxes,” said Dallas attorney Lauren Cadillac, who has often been a thorn in the side of appraisal districts. “It’s a tradition in this country — when we have to pay taxes, we riot.”

Still, the slow, bureaucratic process of filing an assessment appeal is a far cry from pouring tea in Boston Harbor. But Cadillac said people who have been “spontaneously” protesting its valuation this year have done well — people who have delayed protesting for whatever reason “really, really, really feel that way.”

Appeals tend to work like dominoes: When one owner successfully overturns his assessed value, owners of similar properties can also overturn theirs. The state constitution guarantees that property must be taxed on an “equal and uniform” basis, and while the exact meaning of that phrase has been debated for decades, it actually allows property owners to contest their assessment rolls based on their current tax value.

“That’s why you’re seeing Class A industrial buildings still being valued at $70 a foot, while you’re seeing some industrial buildings selling for $130, $120 a foot,” said KE Andrews’ Trahan.

“It’s been very challenging,” said South, from the Hunt assessment area. “I think a lot of owners are frustrated because we just don’t have the data we need to be as accurate as we want to be”

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