We are back in full action. Inventory is growing as fast as expected in the spring. The “for Sale” signs are springing up like mushrooms after the rain. If you drive through the neighborhood during the afternoon time you’ll see ‘open house’ signs pointing in all directions. Homes are being sold fairly fast, especially in desirable areas with good schools.  Some homes in the most attractive areas in Sunnyvale, close to Helena and Wright Ave, were sold under or at the asking price. The agents told me that they were very surprised. Other homes, near Ortega Park in Sunnyvale, were sold with multiple offers way above (18%) asking price. All these homes in both areas needed a lot of work (what we call TLC “tender love and care”).

People always ask me “how much do you think this house will sell for?” or “how much this property is worth?” I run the comps (homes that were sold lately in that neighborhood) and even though I really know all these homes, it’s hard to predict. Who knows how desperate the other bidders are, how many homes they lost out on by trying to offer just enough to get the house and not too much. Who knows what other motivations the buyers have. Some are being vacated from their rentals and are sick of moving, some want to invest their savings in real estate instead of a rocky stock market.  Sometimes we have the chance to raise our bid and win the house but the buyers are not ready to pay so much more than the asking price. Buying a house is not just mathematics. Feelings and emotions play a crucial part in the decision to buy and pay the outrageous sum of money for a hut in the Silicon Valley.

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