http://reidi.propertyinfo.com/HAR/Reports/rptDetail.aspx?Key=HAR&Pin=126-822-000-0074-001&County=HARRIS

The difference in the 2008 and 2009 is likely explained by either the current home owner disputing their previous HCAD appraisal value or having filed their homestead exemption. Again I would like to thank you for taking the time to comment on this blog post and furthermore would like to encourage discussion on this issue or any others you might have.

Now to discuss the 2009 HCAD value for the property. First of all HCAD appraisals are rarely correct, another item is that if a property owner files their homestead exemption the appraisal district reduces the appraised value by approx. 20%. Another issue here is when someone in the real estate field says appraised value they are talking about the value that had been given by a licensed bonded appraiser who visited the property, observed the improvements on the property and then pulled sold comparable properties from a data base. He then makes adjustments based on size of lot, square footage of the home, differences in materials, differences in age and features such as a fire place. This is then called an appraisal of the market value.

Once the appraiser has completed this form of comparison he then will do research on rents for comparable properties in the area and will use the market places current capitilization rate to determine what the economic value of the property is. This is simply what the value of the property would be to someone solely interested in the cash flows the property could generate.

After the apprasier has completed both a report on the economic value and the market value he will do an appraisal based on the cost of replacing the property at today’s cost of goods needed to rebuild the structure. Once he has come up with an estimate for the construction he uses a federally mandated adjustment for depreciation of the structure. This basis of value is called the replacement cost value of the property. Once the apprasier has completed these three items and added a breakdown of both the subject property and the comparables his report is nearly complete. He then will give a weighted interest of each form of appraisal value for each of the three value types to come up with the official appraised value of the property.

HCAD does not send an apprasier to each property in the metro area every year to complete a similar report. They use a computer based algo to come up with their numbers and only occassionally send an apprasier to a property. A competent agent would say that the properties appraised value is $515,000, only if a independent appraisal report such as explained above was completed showing that value. Now if the agent is basing their statement of appraised value on the HCAD tax appraisal and are competent they would refer to it as the HCAD appraised value or County Appraised Value. Now I do not have the appraisal showing a value of $515,000 and so am unable to say why the agent would have said it was appraised at $515,000. If the agent does not have an independent appraisal report on the property and the HCAD value for 2009 is only $373,489 then I believe it safe to say the agent was “mistaking” at best and flat out telling a lie at worse.

Why on earth would you say it is “APPRAISED @ $515,000″

???