We are asked all the time about a properties value by our clients. Determining property value is an important thing to understand when you are trying to buy or sell a home. One of the main issues we run into with clients is that they want to rely on the DCAD (Dallas County Appraisal District) appraisal. This is the assessed value of a property – the “appraisal” that is used to determine the yearly taxes due on that property. There are three main issues with relying on DCAD for a home’s market value.
The first issue is that property taxes may not be raised by more than 10% in any given year by law (unless there is something to trigger a more dramatic increase such as a sale or major renovation). Additionally, reassessments only occur in the springtime and may not hit the DCAD system right away. If we have a year like we had in 2013, with home values increasing over 20% in some areas, the DCAD value won’t accurately reflect market conditions.
The second issue is that property tax records may not be complete or may be inaccurate – this is especially true with older homes. The records may not show an addition that was added, a garage or pool or an attic that was finished out. It may not take into account the ever-so-prevalent “garage conversion.” We have seen houses missing several hundred square feet from the tax records. This can add up to big valuation difference.
The third issue is that Texas is a “non-disclosure” state. This means that the sales price for a home is not recorded anywhere. You might ask how the county figures out a properties value if it doesn’t know what the home sold for. The short answer is that they make an educated guess. What does get recorded with the county is the mortgage amount on a home. This doesn’t help though when a home is sold for cash or a large downpayment is made on the home. Additionally, when new homes are built and permits are pulled, the builders list the cost of the construction or when additions and renovations are made, those costs are also listed on the permit (when required). But the builder’s cost isn’t market value.
Beyond DCAD, there are several websites out there that claim to give you a home value. The biggest of these is Zillow. The problem is that Zillow is relying primarily on public tax records and some other public data to determine value. This is why Zillow’s estimates, especially in Texas, are so often way off the mark.
So, how do you get a more accurate idea of a home’s value? You have to look at the recent sales in a given area of similar homes, with similar features and you need to look at what the sales price was for these homes. This is the only way to get an accurate picture of a properties value. Herron Realty Group agents have tools to provide a good picture of a homes value including statistical analysis software and the ability to see the actual price most homes have sold for and when they sold. This is especially important in a market that is trending up like the market we have been in for over the past year.
If your trying to figure out your house value, give us a call. We’re happy to “run the comps” for you and give you our opinion – and at no cost!