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Texas: An Attractive Place To Retire (After Age 65?), Ctd.

Some readers have challenged this statement, saying our high property taxes may make the Lone Star State not so attractive to endure during those golden years. And Texas does have some of the highest property taxes in the nation.  Now I am light years from being 65, but as I recall, at that age property taxes are capped for seniors — right? Sure hope so, because I am going to need those funds for plastic surgery.

Energy-Efficiency Incentives For Home Buyers Are Growing, Blowing

I’ve heard this from both coasts, and already happening in Austin. FHA is prepared to give borrowers up to 5% more in loans if they use the funds to make their homes more energy efficient. That could be an extra $15,000 on a $300,000 mortgage to use for tighter windows, improved insulation, tank less water heaters, etc. Remember that FHA only covers conforming loans, that is, up to $417,000 in our area. But still, this could not only help spur home sales but stir up business for the folks who make your home energy efficient. Stay tuned this week for an interview with a realtor who takes 1% of his commission, comes to your new house, and puts the money to work making your home superbly green.

Appraisal District Snitches? Please Help This Woman With Her Tarrant County Appraisal

This is only supposed to happen in places like the former Soviet Union, not in Fort Worth. You must read this email. It appears ”neighbors” are informing the Tarrant County appraisal board what “upgrades” folks have in their homes. Listen to this:

“I went before the Tarrant County Tax Review board. I had current market analysis’s from 2 real estate agencies showing that my home should sell for between $131,000 and $139,000, not the $155,000 it was evaluated for. I also took charts showing the homes that sold in in my addition in past 6 month. Average sales price was only $121,000. They lowered my home tax evaluation to $150,000. The county tax appraiser stated my neighbors said my home was upgraded inside with Italian tile, convection oven, etc.etc.   I asked one of the review board how he came up with the $150,000 amount since the Realtors were telling me that my home would only sell for about 132,000. He stated that was between the 3 of them. I told them that I did not feel they had been fair. Do you know any attorney in Fort Worth (Burleson area) to appeal to reduce real estate tax evaluation? “

Tax Doc, do you make house calls to Fort Worth?

Have You Been Conned By Conn’s?

I saw this while tootling around the AG’s website and it reminded me that my kids were about to go to Conn’s to buy a new refrigerator for their CONDO. So they were almost CONNED at CONNS in their CONdo… shame on me for making light of this: if you read the AG’s report, a lot of people have been ripped off by this place. If I were a major Conn’s shareholder, man, I’d insist they chat with the folks at AIG and (1) give everyone they’ve ripped off free appliances for life (2) change their name asap, way overdue on that one (3) behave. If you have been conned by Conn’s, here’s where you can file a complaint easy-peasy.

Texas AG Sues O’Connor & Assoc, Have You Been “O’Connorized”? I Have…

Texas Attorney General Greg Abbott has sued Houston-based O’Connor & Associates, a property tax consulting firm, and a judge has ordered a temporary restraining order against the company based on allegations it violated the Texas Deceptive Trade Practices Act and the Texas Property Tax Code.

The entities charge that O’Connor, which purports to be the state’s largest property tax firm, filed thousands of tax protests without taxpayers’ consent, failed to appear at hearings and submitted fraudulent documents, among other violations, according to a lawsuit filed last Friday in Harris County.

And guess who I hired to fight my taxes last year: O’ Connor & Associates. And this year I was livid when I found out, with help from our Tax Doctor, that O’Connor was my tax agent again.

Every year about this time you get those letters in the mail from “tax consultants” who want to help you battle your property tax bill, a.k.a. Tax Doctors. Many of these are good people who will utilize their real estate expertise and time to save you from an annoying appearance down at the Appraisal District where you might perseverate on your leaking toilets instead of focusing on comps. They are, like our Dallas Dirt Tax Doctor, folks who know where the bodies are buried down there and what points to make in order to lower your property value. They make their money by splitting whatever saings they bring with the homeowner. Been going on for years.

Enter a company called O’Connor and Associates. They send out thousands of letters to consumers offering to help battle their taxes. As I recall, they did nothing for me last year — they missed deadlines and did not lower my taxes. I’m told someone did show up to protest my taxes and I am in the process of acquiring those tapes. The deal is this: once you sign on the dotted and give them permission to be your tax agent ONCE, they are your agent forever, kind of like herpes. You cannot shake them without a written withdrawal. Which is what I plan to do after I figure out just what O’Connor & Associates did or did not do for me last year.

Stay tuned, and let me know if you hired O’Connor & Associates and if they helped you save any money on your property taxes. Who knows, maybe you, too, have been “O’Connorized”. Jump for the AG’s release:

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June 1: Last Day To File Your Property Tax Protest

It’s pretty crazy/crowded down at the DCAD, but Cheryl Jordan says she doesn’t think it’s any more so crazy than year’s past. Have you been down there? Tell us about your experience! Meantime, here is the Tax Doctor’s response to our last reader’s land value dilemma:

“The State Comptroller audits the Appraisal District for “Equal and Uniform”.  It’s easier to sprinkle babies at a Baptist Church  than to get DCAD to change land values.  DCAD will come in and re-value land in areas.  Than to not get the overall value excessive, will adjust the improvement value to zilch. 

There is a nice multi-story building in the 2700 block of Stemmons on for $4.44 per sq ft.  They raised the Stemmons land to $30.00.

 The University Park problem is all the McMansion builders who paid a premium for dirt  That’s good when there’s financing.  But with construction financing dried up, there goes the market.  Look at the overall value of your 50 year property.  In reasonable condition, it will probably bring the assessed value.  People pay big bucks to be in the largest tax supported, private school system in Texas.”

Gotta love the Tax Doctor, he tells it like it is.

 

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What to do When Property Tax Appraisal is up, But Still Lower Than Market Value

After reading the last e-mailed question on property tax appraisals, I thought it a good time to throw my hat into the ring. I don’t pretend to be an expert, but it is my job to have a few thousand of them on speed dial.

So what should you do if your appraisal goes up this year, but it’s still well below the market value of your home?

Don’t panic … You are not alone. Yes, you can still successfully protest your appraisal, you just need to have a few weapons in your arsenal.

Coincidentally, this is a trend that DCAD officials expect to see a lot in the Park Cities and Preston Hollow this year. How did it happen? Certain areas of  Dallas, Preston Hollow and the Park Cities specifically, experienced a whole lot of growth in a short period of time before the recession hit. DCAD can only raise taxable values by at most 10 percent annually and they are still trying to compensate for the big gap between your appraisal and the home’s market value.

When you are preparing to protest keep these things in mind: (more…)

The Tax Doctor Is In. So Email Us

Everywhere I go, from Tom Thumb to Whole Foods, real estate and social events to Labor & Delivery at Presby, first thing that comes out of everyone’s mouth is: “did you get your property tax appraisal?” If it increased, people are hot given today’s market conditions and the constant media drill of blah blah blah home values plummet. Don’t get mad, get on your computer and email me at candye@dmagazine.com. The Tax Doctor is ready. If you don’t see your question posted, email me again. You have until May 31 to file your protest.

Park Cities Appraisals Show Increase of 5% to 10%

I’m canvassing people informally and here’s what I am hearing: most Park Cities’ appraisals have inched upwards, 5% to 8%. DCAD is trying to squeeze more out of Preston Hollow lots — 5% range. I need to hear what’s happening in East Dallas — anyone?

Also calling Cheryl Jordan to find out what the new ”Neighborhood Review” feature is all about when you are looking up properties. It says “enter PIN from Hearing Notice and click OK”. What PIN? What Hearing Notice?

Tax Doctor: Miserable In McKinney

Well, not until he got his tax bill:

“I live in beautiful McKinney, TX … and we got some bad news in the mail yesterday… a 100% increase on our 100 yr old commercial property AND and 40% increase on our home (what the what??)!!!”

Tax Doc, he said McKinney where I am hearing of foreclosures and homes going for 50 cents on the dollar! What gives?

I would check with an Appraisal District residential appraiser.  Ask what sales were used to support the new value.  Then drive by those homes.  Are the comps really comparable with your property?  If not, go in and talk with the appraiser.  Collin County assigns specific appraisers to each neighborhood. They are usually fair and professional. Because Texas is a non-disclosure state, the cost or income approach is used many times in determining value.

How old is the commercial property?  Valuation by the cost approach is land value plus replace cost of the improvements less deprecation from all sources (Physical, Functional and Economic).  The older the property, the less accurate the depreciation.

If the income approach is used (Gross Potential Income, less reserves for vacancy and collection loss) equals Effective Gross Income.  Expenses (taxes, insurance, maintenance, reserves and leasing/ management fees are deducted: this gives NET OPERATING INCOME).  NOI is capitalized at a market derived rate.

You can buy a Walgreens, CVS or IHOP on a sale/leaseback and NNN (triple net whereby the tenant pays for taxes, insurance, and maintenance) on a 7.5 to 8.00 cap.

If they are using the income approach, what is the capitalization rate? Don’t accept a 9.

The Tax Doctor: My Appraisal is 35% Lower –Good or Bad News?

Blue Light Special aisle 12:

“I just received my 2009 residential appraisal and my home in North Oak Cliff was appraised for 35% less than last year!  Does this number affect my ability to sell or refinance my home?  Do I have to file a protest just to get an explanation of why my home value went down so low?  (I have actually made significant improvements in my home over the last few years.)”

Sez Tax Doc:  Good news and Bad news.  Good news is that you will be paying less in taxes.  Bad news is that your property is worth less.  I have not found a lower tax value to be an obstacle in selling.  (May be a plus?) Should you refi, the appraiser will consider similar sales in the area. Check with a neighborhood realtor about actual sales.

The Tax Doctor Is In:DCAD $20K Over Our Recent Appraisal

A reader south of Arapaho, north of Beltline writes:

We’re in the middle of a refi on our home, so we had to get an appraisal for the bank. The appraisal is about 20K lower than the DCAD appraisal we just received. Is this grounds for a protest under the category “Value is over market value”? Do I just bring a copy of my appraisal along with my tax letter to the DCAD office? Help a clueless homeowner out!”

The Tax Doctor says:

The 2007 Texas legislature enacted HB 3024 to specifically address that question.  Take a copy of your appraisal to the District.  Usually, you will not have a problem in the reduction.  A brief overview from the website TXTAX.com is shown below.  Also a link to the full bill. Do not ever go to the Appraisal Review Board without first attempting to work it out with an appraiser in an informal hearing.  Should you file a protest, make sure you are protesting both MARKET VALUE and EQUAL AND UNIFORM.

House Bill 3024. (Effective September 1, 2007).

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Dallas County’s Top Twenty Residential Tax Lords

We thank these fine folks because of the generous contribution they are forced to make to our city’s bottom line. These are their 2008 residential market values. We would like to be a fly on the wall when they open up 2009:

Thomas Hicks – $35,414,280.

John R. Muse – $30,208,470.

Lawrence and Joyce Lacerte – $26,555,260.

Harlan Crow – $24,087,440.

H. Ross Perot – $23,561,350.

Edwin L. Cox Trust – $21,832,500.

Gene Phillips – $19,800,000.

Gerald Ford – $19,289,970.

Mark Cuban – $17,603,280.

Jerral and Gene Jones – $17,343,200

Frederick M. Baron (the late) and Lisa Blue – $17,224,630.

Trammell Crow Life Estate – $15,900,000

Stanford Finney – $15,724,880.

Wallace Birmingham LP (6929 Vassar) – $15,660,300.

John and Debbie Tolleson – $14,944,500.

Billy Don Henry – $14,216,030.

Clint and Nancy Carlson – $14,059,040

Plan II Partners (grounds of Chateau Triomphe)- $13,319,990

Steven and Carol Aaron – $12,853,630.

Terry N. Worrell – $12,725,220.

Commercial Building Sells For Less Than It’s Value

I know many residential properties that have sold for less than Dallas County appraised value:

This year, an office building sold for less than the property’s taxable value – a first in many years, Nolan told commissioners. Usually it’s the other way around and it takes the appraisal district time to catch up and find the true market value, he said.

This is the deal Chief Appraiser Ken Nolan may have been talking about. 5001 Spring Valley, far North Dallas, has an appraised value of $72,154,230. So why do we as consumers care? Because corporations and commercial real estate companies are well-versed in the property tax battle and have tools and troops ready for battle. Residential homeowners generally do not have the resources.

Never fear: the Tax Doctor… is coming.

Dallas County Prepared For Lower Property Values

Ken Nolan, Dallas County’s chief appraiser, says most of the 374,000 property value notices going out this weekend will be flat and 55% will be lower.

The Tax Doctor Is Coming

Gear up for battle: Dallas County tax appraisals will be mailed out Saturday. Tax pros have already received some client appraisals this week and I asked them to give me a sneak peak — is DCAD upping values? No, but they are not lowering them. Still early, but it appears the District would like to hold present values. Commercial property owners are getting far bigger breaks, I’m told. I’m ready, and you can be, too. We have a pro on call to help you wade through the process of protesting your taxes May 1 to 31. So get ready — come next Monday, the Property Tax doctor is IN.

Real Estate Deal Book: $4.44 Per Square Foot For This Building

Buy this building for $4.44 per square foot? Not sure it’s for sale, but what a deal. To get the final market value in line, DCAD has valued the land along Stemmons at $30.00 per square foot. Just the dirt –with me so far?

But this 124,800 square foot building is valued at only $4.44 per square foot. Wow. What a bargain.

Collin County Tax Question

A reader writes:

“Where do I go to protest property tax increases in Collin County besides the official tax office protest – which does no good? Is the only option a lawyer? Are there advocate associations?

Collin Co. raised our taxes on an empty lot over 30%, ignored me at the formal protest, and based the tax on nearby properties located on busy streets – which ours isn’t. The property is also half in a flood plain created by the city, so half of it is useless.

Without any warning or public declaration, they then (in late 2008) changed the zoning to residential – in order to purchase some other lots at lower prices. Our lot is now zoned residential with outrageous taxes based on PD zoning.

What recourse do I have besides filing a protest yet again? They just looked at the facts I presented last time and said “no”. What legal system governs these guys?”

I checked with Jerome L. Prager, a real estate attorney with 40 years of practice experience (started when he was an infant), who is also legal counsel to both the Greater Dallas and Collin County Association of REALTORS®, among others. Mr. Prager, who I turn to as a valued source and you will hear from often on this blog, says get thee to an attorney! And you need an attorney with zoning expertise. You were required to receive notice and afforded an opportunity to protest.  Likely, you should have protested at the re-zoning hearing. Whenever you deal with re-zoning, says Jerry, you need an attorney with mega experience — cannot go in there alone.

Sanity Check: Property Taxes Levied By Developers?

I think this shocks me about as much as Nadya Suleman. I met with a property tax buster yesterday, who tells me that given the way the appraisal district raised appraisals this year coupled with the bleeding housing market, he thinks DCAD had better plan on valet parking come May.

Never Too Early To Start A Dallas Property Tax Protest

A reader writes:

“My dad owns a little rental house in an older section of Carrollton. The value just jumped, which meant a significant hike in his property taxes. My dad called to protest – If housing values are dropping all over the country, he asks, why did his go up by 10%? He was told by the Dallas County Central Appraisal District that Dallas home prices have been unaffected by the housing crisis. Bullocks!

Now I know that Dallas has always been relatively sheltered from mainstream real estate, but prices certainly aren’t on the rise!

Per Standard and Poors, Dallas home values have dropped 3.3% in the last year (http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_012724.pdf).

Per The Real Estate Center at Texas A&M University, sales volume has clearly dropped over the last year as well (http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_012724.pdf).

My dad’s theory is that Dallas County is perhaps trying to make up for sore economic times by raising revenue through inflated property taxes. I’m not sure how many other people in Dallas County are in this boat. However, I figured I’d put the bug in your ear…”

Well, Dallas Dirt community, what do you think?

Pay Your Property Taxes Jan. 31?

If so, did you note a jam up in the on-line credit card processing? I received an error message– “The server encountered an internal error that prevented it from fulfilling this request.” I began freaking out, and was about to drive a check down to 500 Elm Street. Lo and behold, I checked the website and it said they would be accepting credit card payments through February 2, 2009, presumably because of technical difficulties. I just went on line and paid without a hitch. Is it too soon to start protesting values? 

City Garbage Collection Delayed

We are being asked to leave our trash and recycling out an extra day to give the city time to clean up. Which makes me wonder: how do they do garbage collection on gated streets? Any delays in city services?

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Mortgage Rates: What’s The Story, Glory Or Gory?

My prediction: glorious low rates in 6 months. Today was my last full day of class at Champion School of Real Estate before my elective and then — I take the state exam! I am getting my real estate license to be a better real estate reporter for the D Empire and our forthcoming new website. Learned a ton – have TOTAL new respect for agents and brokers. From remembering intermediary to sub agent to IABS forms always need to be in size 10 type to HB 489 to independent contractor status to TRELA and TREC, ostensible authority and agency by estoppel, MLS to agent with appointment, without appointment, all I know is HOW DO YOU AGENTS DO IT? And I need an appointment with a glass of wine!

But, while I was ensconced in academia, history was made in the interest-rate realm. Here a couple of takes on that, jump for one from Philip Walker, one of my favorite agents at Keller Williams Turtle Creek, who brought lunch to recruit the A-plus students. Mortgage rate comments are on and the meter is running:

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Can’t Sell Your Home? Raffle It

I think this is a great alternative to foreclosure. Just think outside the box, I mean, house. Problem: what about the Realtor’s commission?

National Real Estate News & Gloom: 1968 Pricing?

And as I mentioned previously, the NAR wants the government to spend $50 billion to subsidize lower mortgage rates, says that doing so would stimulate about 500,000 more home sales. This request came pre-Citibank bail. By the way Citibank, I think, ought to offer us all 0% interest on our credit cards as a means of saying “thank you, dear taxpayer.”