Because real estate prices have dropped quite a bit, the potential commissions that real estate agents and brokers could earn have also dropped. But the drop in commissions can be more than offset by the amount of properties that can be sold. And getting quality real estate leads is one of the keys to making this a reality for real estate professionals. This is because there are so many more properties on the market now than there were before the bubble burst.The rise in the number of homeowners who are underwater on their mortgages has increased so much that a very large number of them have decided that they cannot afford to stay in their homes. They would rather sell their home and buy a comparable home for a much lower price, and take the loss so that they can improve their cash flow situation by having a lower mortgage payment each month. And since there is no shortage of properties to buy, these people had no problem finding a suitable home for a good price.And another result of the rise in available properties is that more and more people are becoming first-time homeowners. Since prices on homes are falling, more and more people are able to afford a home for the same amount they are currently paying in rent. So the logical choice for these people is to buy a house rather than continuing to rent.These factors all lead to one thing – a higher need for real estate agents to help the buying and selling of all of these properties. Therefore, even though prices have fallen, the quantity of available properties, buyers, and sellers has raised which more than makes up for the lower prices in terms of how much a given real estate agent could make in the current real estate market. And as we all know, the more clients a real estate agent has, the more properties they’ll sell and the more money they’ll make.The problem comes in when a real estate agent has already gone through their current client list. The best way for them to get more clients is to somehow obtain more real estate leads. Not only do they need more leads, they need high quality leads if they are going to be successful in converting a high number of them into clients who actually follow through on buying and/or selling one or more properties.So how can you get more real estate leads? There are of course many different ways. These include buying them from an agency that offers them, advertising, subscribing to lead generation websites, developing and keeping current your own real estate website that draws potentialclients to it, and best of all by getting them through your own network. There are undoubtedly other ways of generating real estate leads as well, but these are the most common methods – all of which have proven to work to a certain degree.One of the easiest ways to get real estate leads is by purchasing them. There are companies whose sole purpose is to find people who want to buy or sell a property. They then sell this information to people who are willing to pay for it. So if you are a real estate agent looking for real estate leads and either don’t have the time to find your own, or simply don’t want to, then this may be a good option for you.There are two different major ways to do this. You can purchase the real estate leads from a company as a set of data that you will get in the form of a list or spreadsheet. Then you will need to start sifting through them and using the data available to qualify and categorize them yourself. And after that, it’s time to start making calls to find out they are valid leads or not.The other way of purchasing real estate leads is by subscribing to a real estate lead generator website that will send you much smaller lists of leads on a regular basis. This can be nice because the information is likely to be much more current than buying a single very large list of leads. But this also means that there are fewer to work with so it doesn’t give you as much freedom in terms of choosing who to contact first.Purchasing real estate leads or subscribing to a lead generation website can also be expensive. This can be a very bad thing since the whole intent of buying leads is to find clients, sell properties, and make commissions, if the leads that you buy don’t turn into commissions. In that case, not only did you not sell any properties (or many properties), but you wasted money on worthless information, and you wasted time contacting worthless leads when you could have been working on finding good real estate leads instead.Another way to generate real estate leads is by advertising. If you are a real estate agent, broker, or business person, advertising your services may be a good way to generate real estate leads. This type of lead generation is great because rather than you doing the work to find people who want to buy or sell a property, the tables are turned and they come looking for you instead.In addition to having people try to find you instead of you trying to find them, there is another benefit to advertising to generate real estate leads. The people who are trying to find you are already definitely interested in buying or selling a property. This means that you don’t have to worry about whether they are going to turn out to be qualified leads or not, because they definitely will be.A similar way to generate real estate leads by advertising which can be even more effective than simply advertising on a billboard or in the paper is by setting up your own real estate website. Websites are surprisingly inexpensive to have hosted, and having one developed for you doesn’t have to be expensive either. And if you learn the basics of website development, you’ll be able to maintain it by yourself after it’s been set up so that you can always keep it current.The reasons to keep your website current cannot be understated. First, you have to keep it updated with the properties you are trying to sell so that the people who visit your website will have something to look at – and since this list of properties will be changing frequently as your client list grows and changes, you’ll need to change your website often to incorporate the new properties and eliminate the ones that are no longer available.A second reason for keeping your website updated on a regular basis your page rank will grow higher. Search engines use a number of factors to determine how relevant they are to certain keywords, and where to display them in a list of search results. And one of the biggest things that moves a website toward the top of the list is it’s page rank, which is greatly affected by how active and how current the website is. So the more often you update your website, the higher its page rank will be, the higher it’ll show up in search results related to real estate keywords, and the more visitors you’ll get to your site.Once you get visitors to your site, you’ll be getting the exposure you want to potential clients for free. They can stay on your site for as long as they want to and look at as few or as many properties as they want to. And you don’t have to do anything in order to help them. In fact there could be thousands of people all on your website at the same time. That is something that you would not likely ever have the opportunity to do in person. This phenomenon is what is known as leverage, and leverage is what can turn a small business into a fortune 500 business in short order when managed correctly.The best way to do real estate lead generation also happens to be one of the most difficult – at least in the beginning. The method of finding leads is by building a very large network, and using it. This is one of the best ways to get leads because it is one of the most surprisingly effective ways. But unfortunately, it’s also one of the more difficult ways to start, and takes a while to yield significant results.The first thing you’ll need to do is to start building your network. And it’s not that you just need to start building it, you need to intentionally focus on building your network each end every day, no matter where you are or who you’re talking to. This is because for most people, networking does not come naturally.If you are like most people, you are probably somewhat shy and don’t make it a point to intentionally meet and talk to new people on a regular basis. But if you want to build a network, you’ll have to do exactly that. This is something that can come as a challenge to say the least, both emotionally and technically, but it is well worth the effort in the long run.It can be emotionally difficult because a large part of building a large network is dealing with rejection. And if you want to build a large network quickly, you’ll have to deal with a lot of rejection each and every day. Too many people, being rejected is taken personally and it ends up wearing them down so that they eventually give up before they gain the benefits that building a large network provides. But if you can learn how to not take rejection personally, you’ll succeed where so many others have given up and failed as a result.And networking to generate real estate leads can be done almost anywhere. When you need to put some gas in your car, park on the other side of the pump from someone who’s already there and try to strike up a conversation where you’ll be able to tell them that you’re in the real estate business and can help them or anyone else they know who may be looking to buy or sell. And if you’re really serious about it, you may want to only get $10 or some other small amount of gas at a time so that you’ll need to go to the gas station more often and have more opportunities to network.You can also build your network by meeting new people at any other place. You could talk to someone at the grocery store, library, church, waiting in line at the bank, or anywhere you are around other people for more than a few minutes at a time and starting a conversation wouldn’t be too awkward. It can be done anywhere, with just about anyone, at almost any time. And the more dedicated you are to it, the faster you’ll be able to grow your network and the better off you’ll be in the long run.Some of the best ways to network are by talking to the people you already know. These are people who are already in your network, and you can use them to help you grow your network even larger. The most obvious way is to simply ask them if they are interested in buying or selling a property in the near future, and to keep you in mind if they are.But another way to help you grow your network is to ask them who they know that may be interested in buying or selling a property. You are basically asking them for real estate leads using different words. You could ask them for the names and numbers of people who they know who may be interested in buying or selling a property, or you could ask them to give your contact information to the people they have in mind when you ask them that question.It’s a great idea to have business cards with your contact information made up when you’re networking. That way you won’t have to rely on people’s memories which are definitely not the most reliable things when compared to something they can simply read from a card. Cards on the other hand make it so that the person you are giving your contact information to doesn’t have to rely on their memory, and it puts forth a more professional image as well which can only benefit you.Real estate values have taken a dive and one of the results has led to there being many, many more properties on the market now compared to before the economy took a dive in 2008. This means that even though the prices are lower, the higher quantity of properties on the market make it possible to buy and sell more of them and make more money in commissions as a result which will more than make up for the decreased individual property values.I order to sell more properties you must have more clients. And to get more clients, you need to have more real estate leads. These real estate leads can be generated in a variety of different ways, all of which can be useful to real estate professionals. Having reliable leads will definitely result in more clients, more sales, and more money made in commissions. Purchasing them, advertising for them, or getting them from your network is all great ways go get leads that all have their own strengths and weaknesses. Pick the one that will work best for you, and you’ll be on your way to making more money through real estate in less time that you think.

Real estate investors instinctively pass on deals presented to them simply because the numbers don’t work. This is quite understandable, however sometimes a little more digging can uncover a simple reason for the property’s lack of cash flow. This issue often comes down to incompetent ownership which results in mismanaged properties.Mismanaged properties or properties which are “underperforming” can be a virtual goldmine if you know how identify and capitalize on the true potential another investor simply is not realizing.Owner incompetence typically comes down to six major issues. In most cases these issues can be remedied simply with a combination of good management practices, an understanding of fair market value pricing and rents in your neighbourhood and of course, injecting a little cash.The following examples generally pertain to smaller multi-families (2 -20 units) however the principles can be applied to larger multi-families.Below market value rentsThis common faux pas stems from a lack of knowledge of fair market value in the area, resulting in a cash flow issue. If a property is at +/- breakeven cash flow at 100% occupancy, any vacancy results in the property owner having to cover any shortfall.The solution is clear. Raising the rents even $100.00 per unit (depending on the number of units) can turn an apparent cash flow issue around. This can be more difficult process however, based on which province the property is in, and the Landlord/Tenant board guidelines of the particular province.As the new buyer of a property, you have the option of requesting vacant possession. This allows you to reset the rental amounts at whatever the market will bear. It is not until you have set the rental amount that you are bound by most provincial Landlord & Tenant guidelines as to how much of an annual rental increase you are allowed.It does need be said that by requesting vacant possession, you must abide by provincial laws which clearly state you must be either moving into the property yourself (or a family member) or you are intending to do significant renovations.Absence of good property managementLack of this skill is one of the biggest downfalls of any would be investor. This encompasses everything from improper screening during the tenant interview process to the daily aspects of running the property. Neglecting any of these areas will result in an underperforming property.Without a rigid system in place to screen the tenants, owners subject themselves to delinquent rents, frequent vacancies and potentially large repair bills. Lack of initial tenant qualification, absence of urgency in collecting rents and not having proper eviction procedures in place are common characteristics of a mismanaged property.Using property management or self – managing is another factor to consider. The novice investor often self manages to save money, however lack of efficiency is typically equated with the lack of time the investor has to dedicate to property management and ultimately the property suffers and becomes an underperformer.Hiring an incapable property management company can also create an underperforming property. Property managers have been known to have poor screening procedures because they only get paid when a unit is tenanted. This is more common than you may expect. The bottom line is low rents and high turnover.Often property managers also outsource repairs and “pad” the bills as extra income. If the owner was in control of the management, they would know exactly what the repair was, the cost of materials and labour necessary to fix the repair, not to mention the name and number of people in their database to do the repair.If the property you are looking at is part of a condo corporation or strata, there could also be mismanagement of reserve funds. This is common and results in excessive monthly fees. Being on the condo/strata board and having a hand in how money is being spent can potentially bring down the monthly fees, thus enhancing the bottom line.Ultimately by leaving the management to someone else or not managing the manager will often lead to underperformance. Negative results stemming from poor property management is also the main reason why many incompetent investors get out of property ownership.Lack of routine maintenanceLack of response to tenant requests of routine maintenance is the number one reason for turnover and vacancy. This obviously results in negative cash flow which contributes to underperformance. This issue is very easy and inexpensive to correct. Hiring a caretaker instead of a property manager who has handyman skills allows payment of an hourly wage instead of an overall percentage rate and “padded” repair costs. A caretaker can show units, perform tenant interviews, enforce leases, collect rents, deal with tenant issues and repairs as well as oversee more significant repairs to ensure they are done satisfactorily in terms of budget, schedule and quality workmanship, especially if you are an absentee owner.I also make sure my tenants get a repair request sheet which forces the tenant to document each repair and creates a paper trail. This helps avoid any hearsay if an issue arises and gives the landlord incentive to get the repairs done within a reasonable amount of time. This goes a long way in creating long-term tenants, which in turn creates an efficient property.Letting properties become rundown by neglecting routine maintenanceThe properties being referred to are neighbourhood eyesores. Common characteristics are unkempt landscaping, clearly visible overdue repairs to even a makeshift car (or appliance) repair/storage facility on the driveway (or front lawn).Not only does the incompetent investor have an undesirable looking property but probably thousands of dollars of renovations. These properties ultimately attract the type of tenant that nobody desires.The good news is they can often be purchased for great deals and turned around into highly functioning properties with good tenants and great cash flow. To understand if it is worthwhile to get involved in such a project, it is important to ask yourself the following questions:a) Is this an ugly property in a good area?b) Are the repairs required cosmetic?c) How much will the repairs cost?d) If I do repair the property, will I be able to raise the rents enough to offset the costs?e) At the proposed new rental amount, how long will it take to retrieve my capital expenditure?f) If I do the repairs and raise the rents accordingly, will this property attract the type of tenant who will want to live in the neighbourhood and afford the “new” rental amount?Not taking initiative in your eviction processAn incompetent owner who allows delinquent rent to perpetuate for months or is not familiar with the landlord/ tenant guidelines can create an inefficient property producing negative cash flow and tenants who often take over the property.These owners can be very accommodating when it comes to negotiation for purchase as they are often looking to get out fast. Properties do not have to be in a bad area to get to this state, they simply have an inexperienced or neglectful landlord.By demanding vacant possession, doing the necessary repairs and creating a new tenant base, these properties can be turned into gems.Records mismanagementPoor record keeping of rental income, repairs, employee payments, property management documents and even lack of formal lease agreements can “catch up” are signs of an incompetent owner. It is surprising the number of owners who run their business with cash and little documentation. This type of owner eventually must “wake up and smell the taxman”. A business can only survive like this for so long before the owner must change their ways or sell.Repositioning PropertiesRepositioning means turning a property into its highest and best use, which is what we have been talking about this far, essentially ensuring the highest potential earning capacity of a property. Let’s touch on the repositioning process.A property that is very accessible to all amenities and transportation could be categorized as an “A” area, but the property could be older, run down and may have significant vacancy, therefore categorizing it as a “B” or even “C” property. A cash injection to improve the property to the standards of the “A” area may allow significant rental increase. Once the building is renovated and can justify higher rents with less vacancy, it is easier to refinance to get most or all of your renovation capital out, allowing you to repeat the process on another property.Unfortunately we can’t reposition all properties. There are many building where the cost of improvement is excessive compared to the increased income expected, or perhaps the area just doesn’t warrant the effort. Proper diligence is everything.When repositioning a property, implement a strategy for both the repairs and the management simultaneously. For the repair phase, make sure to:a) Get at least 3 repair quotes to formulate a budgetb) Hire a project manager if the repairs are extensive; otherwise hire handymen who specialize in particular trades. Make sure they have referrals of past clients you can call, proper insurance and are willing to work within a schedulec) Schedule the maintenance with the contractor or handyman for the quickest turnaround time and put the expected timelines in the contract, including bonuses for being on or under budget and time or penalties for being overd) Base your contract on materials and labour separatelye) Make cosmetic improvements to create a safe and pleasant environment maximizing curb appeal. This will attract better tenants to the property and command a higher resale profitFor the management phase:a) Hire a reliable caretaker or property manager; making sure they have referrals (call the referrals!)b) Create a marketing plan to attract higher income tenantsc) Create a screening system and a tenant retention program for your caretaker or property managerIf you are keeping existing tenants, have your new manager:a) Notify each tenant of the new management and give them a schedule for the upcoming renovations to their unit and the groundsb) Give each tenant a repair request sheet(s)c) Give the tenants a copy of the new “house rules” outlining expected behavior of both tenants and guestsd) Collect any rents which are in arrears and begin immediate eviction proceedings on those who refuse to complye) Alert the tenants of new rental rates on all renovated units. You can get exceptions from some Landlord/tenant boards to raise your rents higher than the annual allotment based on significant renovations or additionsf) Pay any non-compliant tenant a “moving” fee to leaveg) Begin new leases with all compliant tenants if possibleRepositioning properties is kind of like becoming the new coach of a losing sports team ¾’s through the season. (Sounds like the Leafs!) Use your skill and experience to inspire and help coordinate many non-functioning parts into an entity which has chemistry and gels.

Property taxes are one of the largest line item costs incurred by apartment owners. However, many owners do not appeal effectively. Even though owners realize that property taxes can be managed and reduced through an appeal, some view taxes as an arbitrary estimate provided by the government which can’t effectively be appealed. It tends to boil down to the old adage, “You can’t fight city hall”.Fortunately, the property tax appeal process in Texas provides owners multiple opportunities to appeal. Handled either directly by the owner or by a property tax consultant, this process should involve an intense effort to annually appeal and minimize property taxes. Reducing the largest line item expense has a significant effect in reducing the owner’s overall operating expenses. While it is not possible to entirely escape the burden of paying property taxes, it is possible to reduce taxes sharply, often by 25% to 50%.Why some owners don’t appealSome property owners don’t appeal because they either don’t understand the process, or don’t understand that there is a good probability of achieving meaningful reductions in property taxes. Some owners believe that since the market value of their property exceeds the assessed value, then it is not possible to appeal and reduce the property taxes. Although appeals on unequal appraisal are relatively new, there is a clear-cut way to appeal property taxes at the administrative hearing level based on unequal appraisal. Unequal appraisal occurs when property is assessed inconsistently with neighboring properties or comparable properties. Also, some owners are reluctant to hire a property tax consultant, even though many consultants will work on a contingent fee basis, in which there is no cost to the owner unless property taxes for the current year are reduced.Overview of appeal processThe following are the primary steps in the annual process for appealing property taxes:· Request notice of accessed value· File an appeal· Prepare for hearing. Review records. Review market value appeal. Review unequal appraisal appeal· Set negotiating perimeters· Administrative hearings· Decide whether binding arbitration or judicial appeals are warranted· Pay taxes timelyRequesting a notice of assessed valueProperty owners have the option of requesting a notice of assessed value for their property annually. Section 25.19g of the Texas Property Tax Code provides the owner the option to request a written notice of the assessed value from the chief appraiser. Owners benefit from requesting and receiving a written notice of assessed value for each property because it ensures they have an opportunity to review the assessed value. This notice should be sent on an annual basis. The appraisal district does not have to send a notice of assessed value if the value increases by less than $1,000. However, if an owner was not satisfied with a prior year’s value and the value remained the same, the appraisal district probably will not send a notice of the assessed value for the current year. In this situation, the owner might forget to protest since a notice of assessed value for the property was not received.How to file and appealOn or before May 31st of each year, the property owner should file an appeal for each property. However, while many owners are comfortable with an assessed value, in many cases there is a basis for appealing. Two options for appealing include:1. unequal appraisal, and2. market value based on data the appraisal district provides to the owner before the hearing.You can appeal by completing the protest form provided by the appraisal district and indicating both excessive value (market value) and unequal appraisal as the basis for appeal. In addition, the property owner can simply send a notice that identifies the property, and indicates dissatisfaction with some determination of the appraisal office. The notice does not need to be on an official form, although the comptroller does provide a form for the convenience of property owners. (You can access the protest form at http://www.cutmytaxes.com .)House Bill 201 – helpful informationHouse Bill 201 is the industry jargon for a property owner’s option to request information the appraisal district will use at the hearing, and to receive a copy 14 days before the hearing. The name House Bill 201 is derived from the bill used to enact the law. The details for House Bill 201 are located in sections 41.461 and 41.67d of the Texas Property Tax Code. When filing a protest, the property owner should additionally request in writing that the appraisal district provide a copy of any information the appraisal district plans to introduce at the hearing. The appraisal district will typically require the property owner to come to the appraisal district office to pick up the information and charge a nominal fee, typically $0.10 per page. While the cost for House Bill 201 requests are quite low (typically $0.50 to $2.00 per property for residential and commercial) the information is invaluable in preparing for the hearing. In addition, filing a House Bill 201 request is important because it limits the information the appraisal district can present at the hearing to what was provided to the property owner two weeks before the hearing.Preparing for the HearingStart by reviewing the appraisal district’s information for your property for accuracy. If the appraisal district overstates either the quality or quantity of improvements, this will justify a deduction. The next step is to review the information on market value and unequal appraisal provided by the appraisal district in the House Bill 201 package. If the subject property is an income property, review the appraisal district’s income analysis versus your actual income and expense statements. Consider the following areas as opportunities to rebut the appraisal district’s analysis:· Gross potential income· Vacancy rate· Total effective gross income, including other income· Operating expenses· Amount of replacement reserves· Net operating income· Capitalization rate· Final market valueMany property owners and consultants start with the actual income and expense data, and use one or two of the assumptions provided by the appraisal district. However, they primarily utilize information from the actual income and expenses in preparing their own income analysis and estimate of market value for the subject property.When comparable sales are the primary issue in determining market value, start by reviewing the comparable sales data provided by the appraisal district versus the assessed value for your property. Convert the sales prices from the appraisal district to either a per square foot or per unit basis. Then compare the sales to the per square foot or per unit assessment for your property. Sales can be helpful during the hearing.The cost approach is not typically used in the property tax hearings except for brand new or relatively new properties. If your property is new, the appraisal district will probably want to review the cost information and you probably won’t want to show it to them. In many cases, the actual cost of a property is higher than the estimate provided by the appraisal district. If this is the case, you will likely want to appeal on unequal appraisal instead of on market value. No matter how good your argument or how passionately it is expressed, the appraisal district staff and Appraisal Review Board (ARB) members tend to believe that cost equals value for new properties.Deferred Maintenance and Functional ObsolescenceAnother issue that is important for the market value appeal, and to some extent for a unequal appraisal appeal, is information on deferred maintenance and functional obsolescence. Deferred maintenance could include items such as:· rotten wood· peeling paint· roof replacement· substantial repair· landscaping updating and other similar itemsMost appraisal districts give minimal consideration to requests for adjustments based on deferred maintenance, unless the property owner provides repair costs from independent contractors. There are some exceptions where a cooperative informal appraiser or sympathetic ARB will take an owner’s estimate of deferred maintenance and make adjustments based on those costs. Most appraisers and ARB members are much more inclined to make adjustments if third-party cost estimates are provided. In addition, the appraisers and many ARB members are inclined to only deduct a portion of the total cost using the argument, “we’ve been giving a replacement reserve allowance for this item for the past years and it’d be double-dipping to deduct the whole value off it in the current year.” While this is an incorrect appraisal argument, it does tend to be the practice at many appraisal districts. The reality is, the cost of curing deferred maintenance is deducted from the offer by a prospective buyer.Examples of functional obsolescence would be a three-bedroom apartment unit that only has one bathroom, or a two-bedroom apartment that does not have washer/dryer connections in an area where those connections are common. Another example would be an apartment that has a window air conditioner in an area where central HVAC is typical and expected.Unequal appraisal analysisThe Texas Property Tax Code, section 41.43(b)(3), provides for appraising or appealing on unequal appraisal including ratio studies and “a reasonable number of comparable properties appropriately adjusted.” Virtually all unequal appraisal appeals involve a reasonable number of comparables that are appropriately adjusted. Comparables are similar properties.This is primarily because of the difficulty and cost of performing a ratio study. Historically, the position of many appraisal districts was that the property owner needed to get a fee appraisal for each comparable property and compare the market value estimated by the appraiser to the assessed value. The cost of getting multiple appraisals made this process financially impractical. Compiling a reasonable number of comparables appropriately adjusted is simple and straightforward. The first step is to choose a reasonable number of comparables. Usually four to five comparables is the typical number used at a property tax hearing, but in some cases, property owners choose ten to thirty. In some cases, there may only be one to four comparable properties that merit consideration. Most unequal appraisal presentations include three to ten comparables. The number of reasonable comparables depends on the location, type, size and age of the property. For example, there would be fewer five-year-old bowling alleys in the northern part of Harris County compared to recently built apartment complexes.After choosing a reasonable number of comparables, array them in a table format, including fields of data such as account number, net rentable area, year built, street address, assessed value and assessed value per square foot.The next step is to determine whether or not to make appropriate adjustments. For the administrative hearing, if you have truly comparable properties, most boards (appraisal review board or ARB) won’t be concerned with you not making adjustments. If you make adjustments, those would typically be based on factors such as differences in size and age compared to the subject property.You should also review the information in the appraisal district’s House Bill 201 packet on an unequal appraisal. In many cases, the appraisal districts unequal appraisal analysis will document a reduction in your assessed value! If the appraisal districts unequal appraisal analysis documents a reduction, either the informal appraiser or the ARB should make the adjustment in assessed value for you. Having the opportunity to get an assessed value reduced automatically based on the appraisal districts unequal appraisal analysis is one of the reasons to appeal every property every year.Completing Hearing PreparationAfter reviewing the appraisal district’s information on your property, the House Bill 201 package, and your market value and unequal appraisal analyses, determine the strengths and weaknesses of each approach and decide which basis of appeal provides the best opportunity for a meaningful reduction. Although appeals on unequal appraisal have clearly been the law of the land since 2003, some appraisal districts and review boards have chosen to disregard the option for unequal appraisal put forth by the Texas Legislature. Although there is litigation underway which should resolve this issue within the next year, it would be prudent to visit someone who is knowledgeable in local property tax appeals to determine whether the county appraisal district and ARB in your area are considering appeals on unequal appraisal.Set Negotiating PerimetersAfter reviewing the information, it is important to set the highest level of assessed value you will accept at the informal hearing because after you accept an assessed value, the appeal process will be complete for the year and you will not be able to appeal further.Administrative Hearing ProcessThe two steps to the administrative hearing process are the informal hearing and the appraisal review board hearing.The Informal HearingThe following procedure and rules are typical at the informal hearing:· Meet with an appraiser representing the appraisal district. You should be polite and prepared at this meeting. While many property owners are frustrated and angry at the high level of real estate taxes, the appraisal district appraiser does not control the tax rate set by various entities nor the policy regarding property taxes in the area or the state. The appraisal district appraiser is trying to execute his job in a professional manner and appreciates it when property owners work with him on that basis.· Provide the appraiser information on your property and he will review that information and information he has available.· The appraiser will likely make an offer to settle the assessed value of your property fairly quickly. You can either accept the value or negotiate further. Either way, you should know within ten to twenty minutes whether the appraiser will offer an acceptable value. If the value is acceptable, conclude the negotiation by agreeing to the value for the current year. If the value offered is not acceptable, ask to go forward with an ARB hearing.Appraisal Review Board Hearing (ARB)The ARB hearing panel consists of three impartial citizens selected and paid by the appraisal district. The age of most ARB members ranges from fifty to eighty. There is an unfortunate bias in the system since the ARB members are selected and paid by the appraisal district, but most ARB members are reasonable people who want to make appropriate decisions.Like the appraisal district appraiser, the ARB does not set tax rates or tax policy. The members are also not responsible for the effectiveness of local government. It is unlikely to help your case if you complain to the ARB members about either the high level of property taxes or the poor quality of some aspect of local government.The ARB will expect you to make your presentation in about three to ten minutes. They will typically wait patiently while you make your presentation and may have questions after you conclude. An appraiser from the appraisal district, who may or may not be the same person who attended the informal hearing, will represent the appraisal district at the ARB hearing. The appraiser will comment on the evidence you presented and will often present other information the appraisal district has available. If you requested a House Bill 201 package for your property, it substantially limits the evidence the appraisal district appraiser can offer at the hearing. The ARB members may have questions after the appraisers presentation. Then the property owner will be given a final opportunity to rebut evidence presented by the appraisal district appraiser and quickly summarize the evidence. The ARB members strongly prefer you not repeat your entire presentation at this point.After hearing the evidence, the ARB members will confer and make a decision. This decision is not subject to negotiation and they will not revise the decision if further evidence is presented. When this decision is announced, the hearing is effectively over. The ARB will send a letter two to four weeks later summarizing their decision and notifying the owner of a 45 day limitation from the date receipt of the ARB decision to either request binding arbitration or file a judicial appeal.Binding Arbitration or Judicial AppealBeginning September 2005, owners of properties with an assessed value of $1 million or less may file a request for binding arbitration. The owner must file with the appraisal district no more than 45 days after receipt of the notice of the ARB’s decision. The binding arbitration option is interesting because it includes a loser pays provision. The appraisal district pays for the arbitrator’s fee if the final value is closer to the owner’s opinion of value, and the owner pays for the binding arbitration if the final decision is closer to the appraisal district’s opinion of value. Binding arbitration was passed to provide an alternative to judicial appeals, which can be expensive to prosecute.Many owners pursue judicial appeals to further reduce property taxes. In 2005, O’Connor & Associates filed over 1,200 judicial appeals on behalf of property owners in the state of Texas. The judicial appeals can be expensive if the property owner and attorney don’t understand the process and have a plan in place to minimize the cost of legal and expert witness fees. Judicial appeals are typically successful. However, success requires cooperation from the property owner, such as providing responses to questions, documents and a deposition if requested. The judicial appeal is meaningful as an option to minimize property taxes since it reduces the base value. This is important because the appraisal district and ARB consider the base value in the subsequent year when setting the administrative hearing value.ConclusionProperty owners can generate substantial reductions in property taxes by appealing annually. Consider appeals on both market value and unequal appraisal and obtain the House Bill 201 information when preparing for the appeal hearing. Property owners should consider all three levels of appeal: informal hearing, ARB hearing and judicial appeal/binding arbitration. While the ARB hearing and judicial appeal/binding arbitration can be an intimidating process, each is straightforward once you understand the mechanics.