Lessons Learned: Hiring a Property Tax Protest Firm a Waste of Time, But Not Money

Around the time property tax appraisals are mailed in April, I think every address in Texas gets a flurry of postcards from property tax protest firms.  They all seem to have some combination of “property” “tax” and “protest” in their names. Searching Google for “Texas property tax protest service” nets about 25 million results.  Clearly, Texas property owners are unhappy with their biggest state tax. By comparison, the next highest Texas tax is sales tax, but its protests net only about 773,000 results on Google. If the first few pages of results are any indication, sales tax protests are pretty much a business-level expense, not consumer.

Anyway, after a few years of big increases (remember, I’m up 53 percent in five years) I decided to put all those postcards in a drum and pick one (not really). My initial plan was to out the one I used, but in speaking with others who have performed the same experiment, my results are typical. So why point to one firm when my experience is far more widespread?

First, know that whatever leading language the postcards use, they have done no analysis of your property to help in targeting homeowners with unusually incorrect property taxes. They bought a huge mailing list to scoop up as many cases/properties as possible, only doing work once the fee was paid. I know this seems obvious, but some may need reminding.

Lesson Learned: Unsolicited mail remains junk. A bulk mail permit is no substitute for research.

So I filled out the online form and paid my $295 to see what would happen. The only reason I went this far was because first, the money was said to be refundable if they were unsuccessful (they were and it was). And of course I figured I’d get a story out of it, for better or worse (and here we are).

One thing that I didn’t anticipate was that in assigning my protest to this company, I was unable to go directly to DCAD and protest myself were I unhappy. “Anticipate” is probably the wrong word. I knew what I was signing, but didn’t anticipate uncovering a new argument the protest firm wouldn’t use.  And, because of the way things were timed, my case always seemed to be at the very end of any protest window, so there was no time for me to slip in a personal protest if they’d fudged it up.

Lesson Learned: Don’t sign your rights away even if you don’t think you’ll need them for a certain purpose. You may.

The other issue with mass mailing firms is that personalized service isn’t on the menu. You are one of the hundreds or thousands of people who responded. Suggestions made fall on deaf ears or are given a cursory glance. It’s rare an inquiry is answered by the same person twice (depends on the size of the firm).

Actual email received:

Thank you for reaching out.

We are currently experiencing higher than normal call and email volumes.

Your email is very important to us and we will respond to every email in the order it was received.

Thank you and have a wonderful day!

Talk to you soon,

 

All that was missing from the script was a line about “listening closely as our menu items have recently changed.”

Lesson Learned: Were I to use a protest firm again, I’d ensure it offered more personal service instead of operating a “puppy mill” based on volume instead of quality.

Don’t expect speedy service. Often outcomes are not communicated until September regardless of when a property’s hearing is. When you protest yourself, you know the outcome when you walk out the door. So the results of a June hearing wait until appraisals are certified on August 31^st before being mailed in September. That’s a lot of waiting.

July 9 email (a month after my hearing)

“We are currently wrapping up Dallas County. Once the county certifies all values, we will begin to email results between mid to late August.”

September 6 I asked for an update and received:

We are still logging results as we speak. However, I escalated your inquiry to our billing department because this process is taking so long.

They have informed me that your protest this year showed that your property was already fairly assessed and we were not able to get a further reduction …

You will receive a formal letter in the mail in the next couple of weeks with this same information but I did not want to keep you waiting any longer

The check and formal letter were cut September 17 – three months after my hearing.

Lesson Learned: You’re blind to the process and outcome for months. Again, this is spelled out, but I didn’t realize how frustrating four months of “blindness” would be.

In the end, would I use a tax protest firm again? Certainly not one who sent me a bulk-rate postcard. Cattle car service isn’t really service at all.  Would I use a more boutique firm?  I’d have to understand their billing. My measly property isn’t valuable enough to warrant a big outlay in time or money (something taxing authorities count on). To spend hundreds to save hundreds seems pointless. Spending thousands to save hundreds is more of a charitable transaction.

You certainly see this illustrated in the luxury world where tax protesters are listed on a huge percentage of properties compared with those in lower-valued properties. They also list firms offering more personalized, non-postcard, services because the potential profit is obviously higher.

For those of us getting squeezed on property taxes wanting to share our pain, there is a way. While you are unlikely to succeed, next year I recommend spending as much time at DCAD as possible. Go for ad-hoc meetings with appraisers and plead your case. Then go again. And again. It’s a bit like roulette. Then, I’d be sure to go to the formal hearing with as much paperwork and stuttering as you can muster.

Why?  You’re unlikely to be successful, but time equals money. Appraiser salaries, and more importantly, the salaries of the unskilled volunteers who preside over the hearings. The retirees filling the chairs will like the extra money your hearing will generate.

Don’t think of your protest as self-serving. Think of it as helping bored senior citizens augment their Social Security check. Too bad your selfless charity isn’t tax deductible.

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement. In 2016, 2017 and 2018, the National Association of Real Estate Editors recognized my writing with three Bronze (2016, 2017, 2018) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email [email protected]. Be sure to look for me on Facebook and Twitter. You won’t find me, but you’re welcome to look.