I was having an email exchange with somebody about county taxes which are due in the next few days.

Here is what we talked about

Dear David

The seller pays his taxes according to the county assessed price. If it’s a house that was purchased 45 years ago for $28,000 (ha, ha,) her yearly payments should be around $600. Proposition 13 is protecting homeowners from a big raise in tax payments. Not more than 2% a year.

When you buy that same house for $1.1M (I am giving you an actual example from reality) your taxes will be about $13,200 a year. You would have to pay it in 2 installments one by December 10 and the other by April 10. $6600 each.

When you buy the house the county takes time to adjust the prices and you might benefit (temporarily) from that by paying what your seller paid, but be sure that the county will remember you and ask you to pay for the adjusted price. That would be the assessed price. They should send you a letter with the amount that you need to add on top of the original payment and probably let you pay it in 2 installments.
Have a great day!

Miri

—–Original Message—–
From: David

Thanks Miri for the answer. I should check this HUD-1 document.

What are the supplemental taxes? Aren’t they included in the Property tax?

Thanks,

David.

On 4/3/08, Miri Bialik <mbialik@interorealestate.com> wrote:

Hi David, if you just closed on the house there are 2 options:

1. The escrow company calculated your taxes and charged you through escrow and

you are good until November 2nd (becomes delinquent by December 10th)

2. The escrow company didn’t charge you but gave you credit for the time the

seller owned the house and it’s your responsibility to pay.

The answer will be in the HUD-1 document – the closing statement.

Most probably they have already charged you but it’s your responsibility to

make sure that you paid your taxes. The penalty for not paying on time is brutal.

———- Forwarded message ———-

From: David > Date: Thu, Apr 3, 2008 at 3:16 PM

Hi Miri,

Thanks for the information. If I start to own a house on Feb 29,2008

then when my property tax is due?

Thanks,

David

On 4/3/08, Miri Bialik <miri@miribialik.com> wrote:

Hi,

If you own Real estate property make sure you paid property taxes by 4/10/08.

Property taxes were due Feb 2nd and they become delinquent if the county

does not get them by 4/10/08. The penalty is painful.

Always at your service, Miri

Take your typical 3 bedroom 2 bath ranch, in its original condition, clean it nicely and poof, like magic, you turn it into millions of dollars. It was purchased for $28,000 45 years ago. Back then it was expensive. The neighborhood was very quiet and modest, there were cherry and apricot orchards around, in the heart of the Silicon valley. Now the magic word is Cupertino schools. This is the melting pot of the world. Immigrant from India, China, Japan, France, Germany, Finland, Israel, Iran, and many other countries, come to live the American dream. They want to get education, freedom and money. They are willing to pay $140,000 above the asking price for this 1600 s.f. house that has $30,000 termite and foundation damages. Additional $50,000 might be enough for basic remodeling. Yes, you need at least $1,1M to own a modest house in Sunnyvale, Cupertino School District. Last week a nice ranch house was sold with 18 offers and this week a similar house got sold with only 7 offers but the end price was higher. How high can it go?

The spring is here and the real estate market is picking up adequately. Inventory is growing and so is the activity. More homes are getting sold. Desirable areas are still hot. Los Altos homes under $2M (if they are priced competitively) are sold fast with bids above the asking price. The same is happening in Palo Alto, Mountain View, Cupertino, Saratoga and Sunnyvale. If the property for sale is situated on a nice street near a good school, and is priced well, it will sell with multiple offers over asking price.

Sunnyvale, in the Cupertino school district, it hot. There are hardly any homes for sale in the Homestead High School area or the Ortega Park area, which belongs to Fremont High school; homes are being sold for more that 10% above asking price. There were a few ranch- style regular homes that were priced a little over a million within the last 2 months that were sold for around $1.2M. I wonder how these buyers can afford to pay a huge mortgage, raise their kids, send them to after school activities and even send some to private schools and survive. Many of the engineers were fortunate to work at start-ups, or sell high-tech stocks to finance a large down payment. But how do others who work many hours on a fixed salary survive?

Education is the most important factor in the decision to buy a house. Buyers will do everything to live near a good school. This motivation drives the prices up.
There are other neighborhoods that look nice and clean. They sell if they are beautifully remodeled or very aggressively priced.

Can you imagine? In the midst of a market downturn, 15 prospective eligible buyers compete for one home (Carniel). Another home (Richelieu Ct.) was sold for almost $200k more than asking price (with 14 offers) last week. It happened last week in Saratoga. About 6 homes that were priced under $2m were sold for more than 10% over the asking price. Some of them got sold just before the end of the year and some are still in contracts. The rain did not scare buyers away. The same thing is happening in Cupertino, where 12 families competed on one home, and in South Sunnyvale, the Homestead High area, low-end homes in Los Altos (under $2M) and in Palo Alto.Inventory is growing slowly but so is activity.These examples are not valid for every market and definitely not for the entire Silicon Valley. Even in the most attractive market there are homes that are not selling. If they are priced too high, over the market value, they will take a long time to sell and the sellers will end up getting a much lower price when they finally sell. A few examples are a house near Montclaire Elementary School in Los Altos (a highly desirable area) which has been on the market for more than 52 days, and a small house with a huge lot near Nimitz Elementary School in Sunnyvale.Smart buyers are not afraid of looking again at the same homes and offering lower prices. Now is a good chance to get A good deal

So you have decided to sell your home and chose your favorite agent. You are working on preparing your home for sale and beautifying it but in the back of your mind there is always the nagging question, how much shall I ask for it in order to get a good strong offer?

Pricing the house is the marketing strategic. In different times you would use different marketing styles.

In a seller’s market you can comfortably price it low knowing that you’ll generate many offers and get wonderful offers, well beyond  your asking price, but in a transition market like now, you can dream about the good old times and hope for many offers.  Price your house as close to what you think you can get for it realistically. You do not have the luxury of pricing low and get $100k over the asking price with 2 month free rent back and ‘as is’ sale.

For example, Sunnyvale real estate conditions can vary from one neighborhood to another. In Homestead high school area you can still play with the low pricing. Everything sells there. In North Sunnyvale it can’t be done. Together with your agent you can weigh and analyze the local market and set the list price. Cupertino also varies from one neighborhood to another. Monta Vista High school area is still hot while other areas with less desired schools take longer to sell. Price your house as close to the market price but not too high. If the house is priced too high agents and buyers lose interest, the property becomes “stale” and you’ll end up getting less money for your property.