Hi folks, and welcome to the 2021 protest season, which is well underway. I am sure all of you got a shock when you received the dreaded Notice of Appraised Value. Sky-high appraisals weren't entirely unexpected given the Austin real estate market momentum in 2020 and into 2021. The stories of dozens of competing offers, some up to $100k over the listing price, are commonplace. Thank goodness for the homestead exemption, which caps the assessed value increase to 10% over the prior year (assuming no new improvements were added to the property). To learn more about the homestead exemption, check out my blog: The Importance of the Homestead Exemption. Let's dive in and see what else is new in 2021.
The Comparable Sales Report
If you take a close look at what you received from the appraisal district, you'll notice the Comparable Sales Report or the comp grid. Before 2021, WCAD used a technique called Mass Appraisal to value your property. This technique mandates that a single sale be chosen per neighborhood, and *all* properties in that neighborhood derive their values via adjustments to that one sale. This appraised value may be inaccurate depending on how different your house is from that one selected sale. This year WCAD decided to use a different appraisal technique for almost 90% of all residential properties in our county to come up with your appraised market value. This value is more representative because it is based on 3-5 property sales similar to yours in age/square footage/etc. But...
Say Goodbye to Settlement Offers
I know many a happy homeowner who'd file a protest online and within a few hours would receive an email with the subject: "Online Protest Settlement Offer Available." Hooray! Your value just got dropped by $20k. Would you like to accept? Duh! $20k value reduction for no effort sounds excellent! Well, my friends, this will no longer be happening (at least not with the same reduction amounts - you might still get $500 off your property value if you're lucky). The old $20k reduction would be merited because your initial value was calculated using Mass Appraisal. When you'd protest, WCAD would generate the sales grid, and if that value were lower, they would automatically offer it to you.
Should You Still Protest?
ABSOLUTELY! While the comparables valuation is more representative of reality, there are still ample opportunities to lower your value when you protest. However, now you will have to be even more prepared when you go in for your hearing. The appraisers will quickly point out that you already got a good deal (not really!) and an accurate value (nope!).