Add 10% to the HCAD value and you will get lender value.
Good luck!

Jessica: The HCAD appraisal is an irrelevant number as regards your loan. Your Realtor should be able to run the current comparable sold homes in the area for the past 6 months. Those are the numbers that your appraiser will use.

Jessica:
An early Congratulations on the purchase of your first home. No other future home will be as special to you as this one. Do not get concerned with the HCAD assessed value of the property. You need to be more focused on what the other similiar homes sold for with the last six months (the comps for the property). These are the same properties that the lender's appraiser will be reviewing in his process of determining a value for the property. The lender's appraiser does not take into consideration the value assessed by HCAD. The value assessed by HCAD may or may not be accurate. It really depends upon whether the individual homeowner reviews the HCAD value annually and compares it to the market and also similiar properties in their own neighborhood. Hopefully your Realtor reviewed the comps with you before making an offer on the property.

Fun to look at, but to me they have nothing to do with the value of the house. Sometimes they are way under, sometimes right on, and sometimes way over. This can depend on many factors. A brand new home in an old run down neighborhood, might be undervalued. Some who fights the appraisal every year might have the home under valued. I've seen appraisals on $150,000 house be $20,0000 over market one year and drop by $40,000 for the next year. I've also seen higher priced properties in the $500,000 range drop by $100,000 over the course of a year. Very different than lender's appraisals. What I see is lender's appraisals come in very close to sales price. No matter if the deal is good or bad from the buyers viewpoint, they still come in $1000-$2000-$3000 above sales price. Probably the best sense of value for a buyer is the agent's MLS CMA. Your realtor should provide this prior to your purchase.

HCAD appraisals usually happen once per year, and are based on area home sales. Most HCAD appraisals are less than market value; however this is not always the case. Your Realtor should have provided you with a market analysis that would indicate the value range of the home. Your lender will only lend to the value of the home and if the home does not appraise for the sales amount the seller will have to lower the price to sell the home. If you have rolled in your closing cost into the loan then your realtors will have to negotiate a new sales price. From the information you provided it sounds like you might be ok, however you might have to re-negotiate.

Jessica,
Ute's answer was excellent! Do try to stop worrying--you seem to have done your homework... I am from FL and am also unfamiliar with the term "HCAD". I can't think of a regular Trulia poster from TX (please excuse me if I've forgotten someone--if so, chime in!), unless you choose to re-post to clarify further I will assume your question is sufficiently answered. Best of luck and congratulations on your first home!

Being from CA I am not familiar with the term HCAD appraisal, but it looks like you are referring to what the Harris County assessor may have appraised the home for. I am wondering how old the HCAD appraisal is. I would also think that the HCAD appraisal did not take all the upgrades into consideration. I understand your concern, but I don't think you should worry about it too much. If the appraisal should really come back low, you can always go back to the seller and try to renegotiate a lower price. Since the seller would have to deal with this issue again with a new buyer, I would think that the seller would compromise. Congratulations on your first home purchase.