Skip to main content

Property Appraisal Q&A

How do county appraisal districts rate a home's condition?​

CDU stands for Condition, Desirability, and Utility. The CDU score helps determine how well a home is maintained, how appealing it is in the market, and how functional it remains compared to newer properties. A home's CDU will be one of the following: Excellent, Good, Average, Fair, or Poor.

CDU Classifications​

  • Excellent CDU: Describes new or nearly new homes, including updating and upgrading older improvements. All items such as plumbing, wiring, exterior, roofing, HVAC, paint, appliances, etc., that can typically be repaired or replaced have been corrected or recently built. Long-lived major components are functional and contribute toward an extended life expectancy. No functional inadequacies of any consequence are observed, and the property exhibits the highest level of desirability and utility.

  • Good CDU: Homes appear well-maintained but not new, with many having been overhauled or repaired as wear occurred. Little deferred maintenance is evident, and there is a high degree of desirability and utility.

  • Average CDU: Homes exhibit some evidence of deferred maintenance and normal obsolescence with age. Updates and upgrades may be needed, along with some refinishing and repairs. All major components are still functional and contribute toward an extended life expectancy. Desirability and utility are typical of comparable properties.

  • Fair CDU: Homes need considerable maintenance, refinishing, and renovation. Deferred maintenance is obvious and is starting to affect the major structural items, which may be starting to fail. Inadequate desirability and utility may also be affecting the property.

  • Poor CDU: Homes exhibit excessive deferred maintenance pervasive throughout the structure. Demolition and reconstruction may be more cost-effective than renovation and repair. While occupancy is not excluded, desirability and utility are minimal.

An inaccurate CDU score leads to an overestimation or underestimation of its value.

What to Do:​

  1. Review the above definitions of each CDU level and consider which category best fits your home.
  2. Review our HomeFacts report for your neighborhood to see how the typical home in your neighborhood is classified and see examples of homes classified at different levels in your neighborhood.
  3. If your home's CDU fits better in a lower class or is higher than similar homes with lower CDUs, identify the appropriate CDU in our appeals phase.
  4. Collect evidence to support a reduction in your CDU. Evidence can include photos of wear and tear, repair estimates, and any other documentation of deferred maintenance.
  5. Upload your evidence to FairAppraisal AI during the appeal phase.
  6. Note that arguing for a reduction greater than a one-level change in your CDU requires more significant evidence.

How do county appraisal districts rate a home's quality?​

Most appraisal districts use a quality classification system to score a property's overall construction quality, materials, and workmanship. This classification system is different from home's condition score (or CDU) because it only focuses on overall construction quality. For example, a well-constructed, brick home built at the turn of the century can have an Excellent quality class but a Poor CDU if it has been allowed to deteriorate with no maintenance.

Different county appraisal districts use different quality scales. Some range from 1 to 5, while others range from 1 to 26.

Quality Classifications​

  1. Class Low: Low-cost residences that meet only "minimum" building code requirements. New construction in this class is rare. Windows will be few and small. Porches and overhangs will be minimal. Exteriors will be inexpensive panels or siding. Usually, there will only be one exterior door. Plumbing and electrical will be minimal, with cheap fixtures. Roof slope and material will be minimal.

  2. Class Fair: Residences are best described by the word "adequate." Construction is no longer minimal but is considered adequate. The front elevation will have some inexpensive trim. Exteriors will include wood plank, stucco, and brick veneers on a portion of the house. Electrical and plumbing will be standard with cheap fixtures. Porches and overhangs will be similar in construction to the rest of the house. The roof pitch will be steeper, and the material will be standard grade.

  3. Class Average: Residences are more frequently encountered than houses of other classes. The quality of materials and workmanship is "acceptable." Houses in this class are usually mass-produced with stock materials. Roof slopes will increase, as will the overhangs and complexity of the roof style. Better fenestration and ornamental trims are found on the street exposures. House shapes will be rectangular to "L" shapes with some corners and indentations that add to the cost.

  4. Class Good: Residences may be mass-produced in "above average" or better residential developments or built for an individual owner. Good quality standard materials are used throughout. Some attention is given to architectural design in both refinements and detail. Exteriors have good fenestration with ornamental features and materials. Houses in this class are generally larger, with more complex shapes and roof styles than average-class houses.

  5. Class Very Good: Residences are typical of those built in "high quality" sub-divisions and are frequently individually designed. Many will resemble houses in the Good Class but will have more attention to detail and design. Exteriors will have good fenestration with custom ornamentation. Irregular shapes and angles are common with matching roof styles and large eaves and overhangs.

  6. Class Excellent: Custom, designer homes characterized by a high level of quality in materials and workmanship throughout. While not a mansion, the Excellent Class house is a very gracious residence. Special attention is given to the quality and quantity of features and ornamentation. Good and Very Good Class houses will have rooms with raised ceilings, while Excellent Class houses usually will have high ceilings throughout. The exterior will have well-designed, high-quality fenestration with custom ornamentation. Select brick, cut stone, and high-quality siding will be used. Metal and tile roof materials are typical.

  7. Class Special through 6: Luxurious homes built without regard to cost. Each is individually designed with the very best materials, workmanship, finishes, and appointments. Great rooms, media rooms, studies, and even observatories are typical in these classes. Multiple fireplaces are common. A bathroom count exceeding the bedroom count is typical. The very best fenestration, custom multi-story entries, and porte-cocheres are common. Most have metal or tile roofs with exceptional flashing, gutters, and downspouts. Determining the class level is often a matter of comparison. The higher classes will be populated by the largest houses with the most features. Historical and older houses will sometimes have an architectural pedigree. It is important to note that each mansion-quality house is unique in its design, and nationwide marketing is often employed to find the right buyer for a particular house.

Inaccuracies in your classification can lead to an inaccurate assessment and, consequently, an inflated or undervalued property appraisal.

What to Do:​

  1. Review the above definitions of each quality class and consider which category best fits your home.
  2. Review our HomeFacts report for your neighborhood to see how the typical home in your neighborhood is classified and see examples of homes classified at different levels in your neighborhood.
  3. If your home's class fits better in a lower class or is higher than similar homes with lower classes, identify the appropriate class during our appeals phase.
  4. Collect evidence to support a class reduction. Evidence can include photos of architectural features that are found in a lower class.
  5. Upload your evidence to FairAppraisal AI during the appeals phase.
  6. Note: arguing for a class reduction greater than a one-level change requires more significant evidence.

What is a cost adjustment?​

Cost adjustments are used by property appraisers to account for differences between comparable properties and your home. When a comparable property has additional features that your home lacks, the appraiser will reduce that property's value accordingly to ensure a fair comparison. For instance, if a comparable home includes a swimming pool while your home doesn't, the appraiser will subtract the estimated cost of installing a pool from that property's value. This adjustment process helps create an accurate, equitable basis for both appraisal and taxation by eliminating the impact of such differences between properties.

Fair Appraisal Now uses cost adjustments similar to your appraisal district to ensure a valid analysis of your home based on equal and uniform principles.

What is the difference between my home's appraised value and assessed value?​

Your home's appraised value represents its market value if it were sold on January 1 of the appraisal year.

Your home's assessed value is its taxable value, the value used to calculate your actual property taxes. Your assessed value is equal to your appraised value MINUS your appraisal cap exemption, if you have one, and any other exemptions.

What is a comparable property?​

Comparable properties are similar to your property, typically, in terms of location, size, quality of construction, and condition. Comparable properties do not need to be identical, as appraisers (including Fair Appraisal Now) use a cost adjustment process to account for relatively small differences.

What does it mean to have a cooling system?​

Most Texas appraisal districts assume every home has an artificial cooling system, such as window units, central air-conditioning systems, evaporative coolers, whole-house fans, or ductless mini-split systems (also known as packaged terminal air conditioners).

If your house has no artificial cooling system, it is likely that your county appraisal district is unaware and has overvalued your home.

What to Do:​

  1. If your home has no artificial cooling system, check the box on our "Check for Inaccuracies" page that indicates that your home lacks an artificial cooling system.
  2. Collect evidence to support this claim. Evidence can include photos of the sides of your home and attic space to show the absence of these systems.
  3. Upload your evidence to FairAppraisal AI during the appeal phase.

How does my county appraisal district determine the value of my home?​

From the perspective of a Texas appraisal district, there are three primary approaches to appraising residential properties:

Sales Comparison (Market) Approach​

This is the most commonly used method for residential properties in Texas. The appraiser analyzes recent sales of similar properties in the same or comparable neighborhoods, making adjustments for differences in characteristics such as:

  • Living area square footage
  • Age and condition
  • Construction quality and amenities
  • Lot size and location
  • Number of bedrooms and bathrooms
  • Significant improvements or upgrades

Cost Approach​

This method estimates the cost to construct a new home of similar utility, then subtracts depreciation. It involves:

  • Calculating the replacement cost new of improvements
  • Estimating physical deterioration, functional obsolescence, and external obsolescence
  • Adding the land value

This approach is particularly useful for newer properties or unique homes with few comparable sales.

Income Approach​

While less commonly used for single-family homes, this method may be applied to residential properties that generate rental income. It involves:

  • Analyzing market rents and vacancy rates
  • Estimating operating expenses
  • Applying appropriate capitalization rates

This approach is more frequently used for multi-family properties.

In mass appraisal, Texas appraisal districts typically:

  • Develop standardized cost tables and depreciation schedules
  • Create automated valuation models using statistical analysis
  • Apply neighborhood factors to account for location influences
  • Calibrate models using recent sales data
  • Use ratio studies to test the accuracy and uniformity of valuations

The final value estimate often gives primary weight to the sales comparison approach when sufficient market data is available, with the cost approach serving as a supporting method.

What's involved in conducting an equal and uniform study (also known as an equity study)?​

For a Texas equity/equal and uniform study, here are the key components and processes:

Selection of Comparable Properties​

  • Identify 5-10 properties similar to the subject property.
  • Properties should be in the same or comparable market area.
  • Comparables should have similar physical characteristics (size, age, quality, etc.).

Data Analysis Steps​

  • Calculate the appraised value per square foot for each comparable.
  • Perform cost adjustments for significant differences between properties.
  • Calculate the median appraised value per square foot.
  • Compare the subject property's appraised value per square foot to the median.

Reporting Requirements​

  • Identification of all properties used in the analysis.
  • Clear explanation of methodology.
  • Documentation of data sources.
  • Statement of conclusions regarding the level of assessment.
  • Analysis of whether the subject property is equally and uniformly assessed.

This type of study is particularly important in Texas property tax protests, as it can demonstrate whether a property's assessed value is inconsistent with similar properties in the area, potentially violating the Texas Constitution's requirement for equal and uniform taxation.

What is the law that requires equal and uniform taxation?​

Article VIII, Section 1(a) of the Texas Constitution contains the equal and uniform provision, which states: "Taxation shall be equal and uniform."

This simple but powerful statement is fundamental to Texas property tax law. The Texas Supreme Court and lower courts have interpreted this to mean that similarly situated properties should be appraised and taxed in a similar manner. This requirement applies regardless of the valuation method used by the appraisal district.

An important distinction is that while Section 1(a) requires equal and uniform taxation, other sections of Article VIII allow for certain exceptions and special classifications, such as:

  • Agricultural valuation (Section 1-d and 1-d-1)
  • Timber valuation (Section 1-d-1)
  • Residence homestead exemptions (Section 1-b)
  • Disabled veteran exemptions (Section 2(b))

However, within each classification, the equal and uniform requirement still applies. Properties within the same class must be treated similarly for tax purposes.

What is a feature of a home?​

Features describe a built improvement added and fixed to land. Feature is a term that captures a lot of different improvements. For example, it includes the home's living area, porch, garage, swimming pool, and carport. These are all features of a home.

Fee Simple​

Absolute ownership of property, unencumbered by any other interest or estate.

Fireplaces​

Appraisal districts typically recognize fireplaces made of masonry (brick/stone) or prefabricated/metal, in addition to gas log fireplaces. They sometimes count wood-burning stoves as fireplaces.

  • Each fireplace opening is counted separately. Double-sided fireplaces typically count as one fireplace.
  • Fireplace must have a permanent chimney/flue. They must be functional and properly vented, meeting local building codes.
  • Features not counted as fireplaces include decorative non-functioning fireplaces, portable fireplace units, electric fireplaces that don't require venting, and fire pits (indoor or outdoor).

Full Baths​

Contain at least three fixtures: toilet, sink, and shower or bathtub.

Functional Obsolescence​

A flaw in the structure, materials, or design of a building that diminishes its value.

Foundation​

Appraisal districts classify the type of foundation supporting most, if not all, of your home. The types of foundations recognized include the following:

  • Basement or continuous wall
  • Earth
  • Piers or posts
  • Slab

Half Baths​

Contain only two fixtures, typically: toilet and sink.

Heating system​

Appraisal districts recognize the following types of heating systems:

  • Central air conditioning (a catch-all category)
  • Electric furnace
  • Forced air gas furnace
  • Floor furnace or wall heaters
  • Hot water systems
  • Solar heating systems (active or passive solar)
  • Heating units (Packaged Terminal Air Conditioner with heat)

What to Do:​

  • If your heating system cannot heat the whole house, you should include this information in your appeal to lower your appraised value. Fair Appraisal AI will ask for this information during the appeal phase.

Highest and Best Use​

The reasonably probable and legal use of property that results in the highest value.

Land Area​

Land Area refers to the total square footage of the land that define your property. This information is collected from property deeds. Inaccuracies in land areas are rare but may occur if the square footage was incorrectly measured or inputted or if a change in the property area was not updated, leading to an overvalued or undervalued appraisal.

If the land area is mistakenly recorded as larger than it is, your property taxes may be higher than necessary.

What to Do:​

  1. Review your appraisal for accuracy and compare it with a property survey or deed.
  2. If your land area is overstated for taxing purposes, upload this information during Fair Appraisal AI's appeal phase. This evidence could include a survey or legal description of the property.

Living Area​

Texas appraisal districts typically define living area (also called living space or gross living area) as finished, above-grade heated and cooled space. Areas that are suitable for year-round occupancy and that are directly accessible from other living areas. This definition excludes detached backyard apartments because they are not directly accessible from other living areas due to their detached nature.

Living Area Includes:​

  • Primary living spaces (living rooms, bedrooms, kitchens)
  • Bathrooms
  • Hallways and closets
  • Finished attic space if properly converted to living space

Living Area Excludes:​

  • Garages
  • Carports
  • Unfinished basements
  • Patios and porches (even if enclosed)
  • Below-grade spaces
  • Unheated storage areas
  • Utility rooms outside the main living space

Living areas are measured from exterior walls and calculated to the nearest square foot. If a home has multiple stories, measurements should be made per floor and totaled. Stairways are counted on each level they serve.

Market Value​

The most probable price a property should bring in a competitive market under normal conditions. Appraisal districts determine a home's appraised value based on its market value on Jan 1 of the tax season.

Net Operating Income (NOI)​

The annual income generated by an income-producing property after deducting operating expenses.

Open Patio​

A feature that is an uncovered paved area.

Roof Cover Material​

Appraisal districts classify the type of roofing material covering most, if not all, of your home. The materials they recognize include the following:

  • Asphalt shingles
  • Concrete
  • Composite roll
  • Concrete tile
  • Metal
  • Inexpensive metal (typically corrugated steel, agriculture-grade, light gauge metal)
  • Plastic tile
  • Build up tar and gravel
  • Tile
  • Wood cover
  • Other materials

Stories​

Appraisal districts classify homes based on their number of stories. Stories are a key factor in determining home values.

Types of Stories:​

  • One-story homes: Have all living areas on one level. They have no stairs to living areas but may have different foundation heights or split levels.
  • One-and-one-half-story homes: Typically have a main floor plus a partial upper floor. The upper floor typically has sloped ceilings or walls, and it has less living area than the main floor. The partial upper floor is often built into a roof area with dormers.
  • Two-story homes: Have two full floors of living area. The second floor has full-height walls. Both floors have similar square footage with complete stairs between levels.
  • Multi-story homes above two and a half stories: Have more than two full stories. They have full flights of stairs between floors and some have elevators.

Appraisal districts will classify split-level homes as one-, two-, or three-story homes, depending on how much their levels are offset. Split-level homes have living areas on different levels with short flights of stairs between levels.

Subject Property​

The subject property in an appraisal is the property being appraised.

Year Built​

The number of years that have elapsed since construction of a building was completed.

Effective Year Built​

The effective year built represents the adjusted age of a property that reflects its current condition, utility, and remaining economic life, rather than its actual chronological age or original construction date.

Key Aspects of Effective Year Built:​

Major Renovations and Updates​

The effective year built can be adjusted when significant improvements are made, such as:

  • Complete kitchen remodels
  • Bathroom renovations
  • Roof replacement
  • HVAC system updates
  • Foundation repairs
  • Complete rewiring
  • Plumbing system overhauls

Calculation Considerations​

  • The extent and quality of renovations
  • The percentage of the home that was updated
  • The impact on the overall condition and utility of the property
  • The remaining economic life of the improvements
  • The market reaction to the updates

Impact on Valuation​

  • Affects depreciation calculations
  • Influences comparable property selection in some counties
  • Helps determine effective age for the cost approach
  • Can impact market value in the sales comparison approach

For example, a home originally built in 1970 that underwent extensive renovations in 2015 might have an effective year built of 2000, reflecting its updated condition and utility relative to other properties in the market.

Appraisal districts use the effective year built to ensure properties are valued fairly based on their actual condition rather than just their chronological age.

Why is my home appraisal decreasing while my property tax bill increases?​

This pattern of decreasing home appraisals and increasing property taxes is most likely due to the presence of an appraisal cap.

Homestead appraisals are not allowed to grow by more than 10% annually. Therefore, if the real estate market in your area is appreciating rapidly, your appraised value may be lagging behind the true market value due to the appraisal cap.

Even though your appraised value may be decreasing, your property taxes could still increase if your local tax rate is rising faster than your appraised value is decreasing.