Bought a new home recently for the first time in a while and received a letter from HCAD asking to confirm ownership, property and mailing address but on the questionnaire immediately asks sales prices, loan amount, repairs, etc.

Throw in the trash, complete the form fully, or partially - ignoring sales price and loan amount?

To be fair, how does the CAD know which repairs were known prior to sale and factored in vs not? Using the sales price to establish value sn't that crazy to me.

Seller was a dick for reporting it of course, but the CAD can get that info from the MLS as well.

I shared my inspection report and quotes for the repairs I had so far and they didn't care.

so were you arguing that you: bought the house without knowing about those defects, discovered the defects later on, and didn't cure the defects?

Discovered the defects after moving in and had quotes and work started on.

right, but wouldn't that mean that their value is correct once you made the repairs?

I guess they can take my word for it with photographic evidence. Several items were trees that died from the drought we had as well as other issues that drought caused. Those would clearly have happened after purchase. Another was moisture issues in the slab and those also were not on inspection reports etc that clearly would have also come up in the due diligence period. All drought related issues were of course after the purchase. I had my arguments pretty well laid out. Maybe I was naive in thinking they would accept my arguments in good faith but I guess there are probably a lot of people that commit fraud in these so probably don't get benefit of the doubt.

And on the topic of sales price, and I could very well be wrong here, but isn't the CAD not supposed to be using MLS sales data for their valuations? This is one reason why they ask buyers and sellers to self report? They wouldn't ask for that information if they could just grab it off the MLS.

There's a lesson here though, because something happened this year I never expected. I submitted my protest for usual, and added some of my evidence in writing without photographs. Was continuing to compile evidence to make my arguments this year, when the CAD sent me a settlement offer over $120000 off the initial increased assessment. The value is lower than my recommended valuation and over $100000 less than I paid for the property 2 years ago. I've never seen anything like it in the 15 years I've owned a home. I've never signed an agreement faster. Imagine being a sucker who doesn't protest every year and just taking what they serve up.

Maybe the following year. If they base their valuation on 2020 and I made most of the repairs in 2021, then the house wasn't as valuable during the tax year.

They're not supposed to use sales comps to come up with value but I think they're free to use sales data during protest.

I get what you're saying and don't love the whole valuation process but expecting them to adjust values based on whatever defects were found at a particular moment is a stretch.

There's a crap ton of older homes out there with various stages of deferred maintenance outstanding, while being valued at a higher number, so it all should come out in the wash.

I ignore them.

Junk mail. Trash it. When involved with Govt, never provide data that is not mandatory. This request is basically a self-reporting of market price. Tax value will increase to what you self-report.

What would prevent someone from under-reporting the sales price by deducting the value of repairs needed to be made? Not advocating for it, just curious.

Kinda like a jury summons, how are they going to prove you got the letter?

fire09 said:

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What would prevent someone from under-reporting the sales price by deducting the value of repairs needed to be made? Not advocating for it, just curious.

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While I would suspect that nothing would likely happen, this seems like one of those instances where they could "make an example" of you for lying on a government document and throw the book at you while they let murders and rapists out on PR bonds. Better to just throw it in the trash.

My recommendation for the first year would just be to lay low and don't fight/protest anything unless they value over your purchase price. Otherwise, they will 100% hide behind the argument that your sales price is the best market indicator and not change anything. After the first year passes, then start hitting them with the repair quotes. Remember, it's the value of the house on Jan. 1, so if you make a bunch of repairs in October/November, you don't get to take those off come the next January 1. You need to have the quotes/pics/etc. based on how the house sits on Jan. 1. Then you can make whatever repairs you want.

Now, you can always work around this by saying that pics from November (pre-repair) were really taken on Jan. 1, but you can only use those pics once. They save them in their database and if you try to use the same pics next year, they'll pull them up and call you out on it (ask me how I know). I tried to use the same pics on back-to-back years showing some cracks and other needed repairs because I didn't make said repairs and the condition hadn't really changed. Mistake. Take new pics, even if its of the same stuff.

Captain Winky said:

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I did the same when we purchased a few years ago. I showed them some significant repairs that were needed that could not have been caught during an inspection. They just said, oh well you should have known about those issues and factored it into the final sales price. Too bad I couldn't pull up the carpet to find the floor and foundation needed to be repaired or the major electrical issues behind walls.

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Just for informational purposes. Market Value has a specific definition in the tax code.

Quote:

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Texas Property Tax Code, Section 1.04 DEFINITIONS

(7) "Market value" means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
(A) exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
(B) both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use; and
(C) both the seller and purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

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It is not stated or implied that both or either party need to have absolutely full knowledge of all characteristics and faults or defects that might be present at the time of the sale for it to be a transaction at "market value". From what you described, the subject property theoretically sold in a transaction for a certain amount fulfilling all the requirements to be a perfect indication of "Market Value"

Ideally, you would get a break and if there is evidence of an obvious defect that existed on the assessment date, the CAD and ARB would consider it. However, an argument could easily be made that such a defect only impacts the market value after it is discovered.

You might have a good argument if you could prove the seller knew and took advantage of you maybe, and therefore the sale was not a good indication of market value because of (C)