Appraisal Value Vs. List Price (Houston, Pearland: sales, real estate, mortgage)

[kaimuki]

There are a number of listings that my wife and I have been interested in in the Katy, Cy-Fair, Pearland, Tomball and Spring areas. When checking the tax information page on these listings at har.com, many of them are listing WELL above the appraised value. In some instances it's over 200K, how can this be? We are first time home buyers from Hawaii relocating to the Houston area. Our lender told us they will not underwrite a mortgage greater than the appraised value. So, am I to assume the listing that we like in South Katy listed at 394K, and an appraised value of only 178K, will require us to put more than 200K down? Or is the har.com tax info incorrect? Yikes!

[Prinny]

Have you spoken w/ a Realtor? When we looked at vacation propert in Houston we had preapproval from the bank first and went to Houston to look at the homes, then we would decide.

Now if the homes are listed above appraisal, I would think you have room to negotiate. Doesn't sound right, especially in today's market.

[starkeshia]

Originally Posted by kaimuki

There are a number of listings that my wife and I have been interested in in the Katy, Cy-Fair, Pearland, Tomball and Spring areas. When checking the tax information page on these listings at har.com, many of them are listing WELL above the appraised value. In some instances it's over 200K, how can this be? We are first time home buyers from Hawaii relocating to the Houston area. Our lender told us they will not underwrite a mortgage greater than the appraised value. So, am I to assume the listing that we like in South Katy listed at 394K, and an appraised value of only 178K, will require us to put more than 200K down? Or is the har.com tax info incorrect? Yikes!

I don't know if the tax info that har.com is displaying is fully up to date, but the up-to-date information I see on HCAD.org sometimes doesn't match up with the true value of the property. Sometimes the appraisal district is high, sometimes they're low, sometimes they're dead on. The appraisial that the bank is going to look at will be done by a professional appraiser who will spend orders of magnitude more time arriving at a value than the appraisial district does.

[Poltracker]

The tax appraissel and the value appraissel that a bank conducts often have nothing to do with each other. Texas has limits on how much they can jack up your taxes per year and if the owner has been diligent in protesting, it can make a huge difference. Appraissel may also be frozen for various reasons allowable under the law. Another situation is if the house is new construction, you may be looking at just the appraissel on the property. That would change drastically nect year when the new appraissel comes in. Bottom line, do not depend on tax appraissels for home value.

[modster]

On this, I am absolutely adamant.

HCAD values have nothing to do with real market value and everything to do with how well someone fights their taxes.

When I sold a house off Washington Ave several years ago, I paid someone to fight my taxes for me. They dropped the valuation from something like $227,000 to $180,000.

Did the value of my property drop that much from one year to the next? Of course not.

What if I hadn't bothered to fight my taxes, would my house be worth more because of it? Of course not.

No, do NOT get hung up on what HCAD says.

[chris_ut]

Appraisal can be very different than market value but I would be very suspicious if their asking double the appraised value. Should hire your own appraiser to determine true market value on the property if your thinking about buying it.

[Bike4Life]

The county apprasial value is not what loan officers rely on, it's really quite useless for real estate transactions. When you make an offer on a brand new house like in Westwood for an asking price of $394K, perhaps they torn down grandma's old house tax valued at $178K. So, your bank may send out an apprasier and get a certified apprasial value. If it says it's worth $400K, then your loan process will go forward. But the the house is $380K, then your bank will ask you to re-negotiate to pay only $380K or less.

[sunny57]

Originally Posted by modster

On this, I am absolutely adamant.

HCAD values have nothing to do with real market value and everything to do with how well someone fights their taxes.

When I sold a house off Washington Ave several years ago, I paid someone to fight my taxes for me. They dropped the valuation from something like $227,000 to $180,000.

Did the value of my property drop that much from one year to the next? Of course not.

What if I hadn't bothered to fight my taxes, would my house be worth more because of it? Of course not.

No, do NOT get hung up on what HCAD says.

Mod...you are correct...HCAD value is not the same as market value. When comp's are done to determine a value for listing (selling your home) purposes...HCAD values are not considered. Market value is what the sales market will bear in that moment in time..the HCAD value is what the taxing authorities value your home for tax purposes....As Mod mentioned this can be influenced by protesting your taxes. Hope this helps...Sunny

[Kappinator]

I recently had a customer from London who had difficulty with this as well.
I explained it this way. Instead of using the word "appraisal" when talking about taxes, use the word "assessment". Harris County taxes are paid to Paul Bettencourt, Tax Assessor-Collector. The appraisal is done by the lender to make sure they are lending money on a house that has X amount of value. As modster said, they are two different things and one has no relation to the other. You want the tax "assessment" to be lower than the market value...you will pay less taxes. Hope this helps.

[tstone]

Originally Posted by chris_ut

Appraisal can be very different than market value but I would be very suspicious if their asking double the appraised value. Should hire your own appraiser to determine true market value on the property if your thinking about buying it.

Agreed. Something about that gap still throws up a red flag to me.