Reinventing residential real estate in Silicon Valley with $275 million in sales in 2011

 

1. Choosing the Best Realtor
2. Marking Your Home’s Interior Shine
3. Repairing and Improving the Right Items
4. Enhancing Curb Appeal
5. Disclosing All You Know
6. Pricing Your Property
7. Marketing Your Property
8. Evaluating an Offer
9. Closing the Deal
10. Reducing Your Taxes

  

 

Choosing a Realtor is generally both the first and most important decision you will make in your home selling process.  Frequently, a home will be your largest asset and you want to be certain that your Realtor has the expertise, experience and enthusiasm to be trusted with the preparation, marketing and sale of your home. 

 

In addition to the list of frequently asked questions you should ask any prospective Realtor that is provided in this booklet, you will want to look for the following factors in making an informed and educated choice.

 

The maxim that 10% of the Realtors are doing 90% of the sales is true.  Generally, you will want to work with a Realtor who is experienced in selling homes in your area and also brings great expertise to the table.  Focus on the region in which the agent's sales are located, for a great agent in South San Francisco is a poor agent in Palo Alto.  Additionally, by hiring an agent expert in your area and with local connections, he or she will have a strong support team including a stager, landscaper, contractor, handyman, painter and floor person to assist with the preparation of your team. 

 

Real estate is local and you want an agent expert on your city and local market so it is best to interview an agent successful in your city.  I am currently the #1 agent out of all brokerages for combined sales in the cities of Palo Alto, Los Altos, Menlo Park and Mountain View (per MLS for the last 12 months at the time of writing) and ranked amongst the top 100 agents in the nation (by the 2009 Wall Street Journal rankings based on sales volume). When preparing your home for market to implement improvements that have over 100% return on investment, I work with my trusted and experienced team in orchestrating all of the repairs and/or improvements we mutually decide upon in as seamlessly and cost effective manner as possible.  My goal is to not only get you the best price and terms possible for your home, but to make the home selling process as stress free as possible.

 

For most agents, becoming a real estate agent is a secondary career and several agents had impressive backgrounds before entering real estate that provide assistance to you when selling your home.  For example, a former interior designer could provide insights on effective staging and a former teacher would likely have an organized plan and chronology for the sale of your home.

 

Before becoming a real estate broker (which requires more expertise and experience than an agent) I was an attorney for several years at the Palo Alto law firm of Wilson Sonsini Goodrich & Rosati.  In college I majored in Mathematics and Economics and graduated from law school at U.C. Berkeley School of Law (Boalt Hall) with High Honors.  I have always been an avid real estate investor (I currently own 5 homes in Palo Alto and Mountain View) and left law for real estate to successfully combine my passion for real estate with my legal expertise.  I live in Palo Alto with my wife Megan and our 4 children who all are in or will attend Palo Alto public schools.

 

This may arguably be the most important criteria for choosing the best Realtor who will get the best price and terms possible for your home.  Obviously, no agent can change the market, but effective and extensive marketing can generate substantial interest which will lead to the greatest amount of potential buyers seeing for and potentially vying for your home.  Some agents will merely put your home on the MLS and not take the time and effort to ensure that it is well presented.  Others will invest their time and money to provide your home with the marketing necessary to showcase its beauty and strongly position your home in the marketplace relative to other comparable homes.

 

I seek to provide the most extensive marketing for my listings to ensure that they receive the most exposure possible to attract the attention of as many buyers as possible.  Just as in high school everyone wants to date the most popular girl or guy, when a home is well marketed and draws in a lot of buyers it gives other buyers confidence to proceed with a strong offer since they know other buyers want your home as well.

 

To generate as much attention and buzz as possible, I shine the spotlight brightly on your home by having full-page color ads in several local newspapers.  Because I spend around $300,000 a year in marketing, I get excellent positioning of my ads including frequently being on the back cover (such as every Wednesday and Saturday with the Daily Post).  When the many buyers arrive at the open houses promoted in the ads, they will be able to drink lattes/mochas/Italian sodas and eat catered food, a way to make the open house more like a warm, inviting party than a cold open house.  Additionally, it will make your home stand out and be more memorable and distinct.  I will hand buyers a 4 page color brochure which contains professionally taken photos and descriptive text to highlight your home's many amenities. 

 

Because this is Silicon Valley, you will want an impressive online presence as well.  For each of my listings I have a graphic designer create, there is a custom website created for your home such as www.744rosewood.com.  The custom website will have a professional video tour where a videographer films your home for several hours and edits it down to a few minutes that truly show the layout and flow of your home while telling a story.  Often when I have buyers come to my open houses they compliment the website and say that they already feel like they know the home from the many photos and video tour that is on the website. 

  

The opposite of getting a listing due to excellent and innovative marketing is for agents seeking to "buy" your listing by providing you with the highest list price but no justification or marketing to back that up.  The market is the market and just because one agent is willing to list your home higher than another (with the expectation that they will get you to drop the price in a month and then likely again in the future) does not translate to buyers' thinking your home is worth more, in fact the opposite usually occurs as a listing gets stale and a stigma attaches if it lingers too long.  When evaluating Realtors always remember that the list price is a means to the end and it is the sales price that matters most.

 

As a recent example of the harm that can come from an agent "buying" a listing, I was in contention for a listing in Los Altos.  I told the seller, with whom I had a strong rapport after several meetings, that I thought his home was worth $1.85 to $1.875 and that we should list his home for $1,895,000.  Instead, he went with an agent who told him he thought the home was worth $2,395,000.  After the home languished on the market for months two price drops brought the home down to $1,895,000, but with the home being stale and forgotten about, I brought in an offer of $1,700,000 and we had it accepted at $1,750,000 and received a large credit for closing costs.  My buyer was motivated by the good value, which unfortunately came at the seller's expense.  This has happened to me twice in the last 8 months (where both sellers really liked me but felt my realistic list price was too low and then I later brought in the buyer after multiple price drops, with the sales price in the end being well below my original analysis).  In sum, choose whatever Realtor you feel will provide you with the greatest marketing to generate the most interest resulting in the highest sales price and avoid the red herring of falling for a high list price.

 

Generally, a full-service real estate agent will charge you a commission of 6%, with this being divided 4 (roughly equal) ways between the buyers' agent, buyers' brokerage, your agent, and your agent's brokerage.  Some discount brokers will provide fewer services and can charge less but this is a typical commission for a full-service broker.

 

For properties below one million I charge a 6% commission but for properties listed above a million I only charge a 5% commission.  Because I spend so much on marketing (more than any other agent I know of), I net less than other agents but I have so many satisfied clients who happily refer me to their friends I do fine and have succeeded so quickly in large part by putting the clients' interest first.  In sum, I provide the highest level of service for the same or less cost than other full-service agents will.

 

Beyond whether your agent is doing the best in marketing and preparing your home for market, you will want to be confident and trust that your agent always puts your interests ahead of their own.  While this may be hard to fully ascertain in an hour or two meeting, getting referrals from past clients or viewing what is said about your potential agent in online directories is good due diligence.

 

On a personal level, it is very important that my clients have confidence in all that I am doing on their behalf when selling their home.  I can happily provide references from many satisfied clients and also have strong feedback on sites such as yelp.com and social networking sites on both a local level such as the Palo Alto and Menlo Park Parents Group or on linkedin.com.  Please let me know if you would like me to provide you with any references.

 

 

Staging is the art of preparing a home for sale.  Staging can be as simple as rearranging your existing furniture or as involved as removing all of your furniture and replacing it with “staged” furniture.

 

A study of local homes compared the sales price and time of sale of homes that were staged versus those that were not.  Staged homes sold for approximately 5% more than those that were not staged and sold within half the period required for the non-staged homes.  Given that the average home in Palo Alto sells for over one million dollars, this is a $50,000 differential.

 

The costs of staging vary proportionally to the level of staging offered.  If the seller does not want to pay for any staging services, their Realtor should assist them in utilizing the existing furniture and lessening clutter.  Another partial option is to pay for a stager to consult on an hourly rate and guide the staging of the sellers’ furniture.  The fees for this generally run around $800.  The best option is to have the stager partially or fully furnish your home.  This can result in a set-up fee ranging from $2,000 - $4,000, and a monthly furniture rental rate ranging from $1,500 to $2,000.

 

Staging is generally considered to have a greater than 100% return on investment.  You will generally get at least your money fully returned to you from the staging, and usually quite a bit more, from the increase in the price of your home.

 

Whether you utilize a stager or not, the following recommendations for each room will improve the appearance and final sales price of your home.

ELIMINATE CLUTTER!  Removing knick-knacks and unnecessary furnishings will make your home appear more spacious and attractive.  Generally, about ½ of a seller’s furniture should be removed to make the home appear larger and less cluttered.  To help remove these items you can hold a garage sale, store unused items, or prepare to move before your home goes on the market.

 

Use neutral colors, finishes, and styles.  The goal is to have your home be a blank canvas where potential buyers can imagine their own belongings.

 

Clean or replace all carpets.  This relatively inexpensive act makes your home show much more beautifully and has over 100% return on investment.

 

Do not over-improve your home relative to the neighborhood.

 

Have your home inspected prior to making large improvements.  For example, you do not want to have your newly installed floor have to be ripped up due to water damage being found below.

 

Remove or open curtains and blinds that block natural light.  “Light and bright” homes are cheerful and sought after.

 

Remove personal items such as photos, postcards, and religious and political material.  Otherwise, potential buyers’ will focus upon who the seller is instead of the house.

 

Rooms should have one function.  The combination office/exercise room/children’s playroom confuses buyers and makes the house feel short on space.

 

 

Studies indicate that buyers consider the kitchen to be the most important area in the home.  While a major kitchen remodel will not add more value than its cost, the minor aesthetic improvements suggested below will make your kitchen shine without costing you a great deal.

 

De-clutter the kitchen countertops by removing appliances.

 

Re-paint dark cabinets with light paint.

 

Install new knobs on kitchen cabinets.

 

Replace badly worn linoleum floors with a neutral colored flooring.

 

Clean fans and vent hoods.

 

Bathrooms:

 

Replace an old towel rack with one of brass or oak.  Replace old towels with clean and fluffy towels.

 

Place an air freshener in a discreet place.

 

Place all bodily care articles out of sight.

 

Remove toothbrushes, combs, and grooming supplies from the counter.

 

Clean all mirrors, counters, and toilets.  Eliminate all soap scum, mildew, and stains from bath, sink, and toilets.

 

Keep all toilet seat lids closed.

 

Consider replacing old sink faucets or other plumbing fixtures with new fixtures (usually brushed nickel).

 

 

Organize closets to increase their perceived size.  Store unused clothing.

Throw away unused hangers.

 

Mirrored closet doors can make a room appear larger.

 

Avoid oversized beds in rooms that are too small or cluttered.  Small rooms should have a twin bed and a nightstand, but no bureau.

 

Remove televisions.

 

 

Use mirrors whenever possible to enhance the size of the room.

 

Sweep the fireplace clean.  A warm fire can create warmth on a rainy, winter day.  During summer, dried flowers or fresh indoor plants in the hearth can add decoration.

 

Keep the garage somewhat neat and uncluttered to show its true size.

 

Hang up gardening tools.

 

Clean oil stains.

 

 

Major repairs, such as adding a new wood deck, adding a room, or completely remodeling your house, generally have under 100% return on investment.  It usually takes years before the expense of these items is recouped, if ever.  The major improvements that come closest to having 100% return on investment are remodeling kitchens and bathrooms and possibly the addition of a second bathroom or a third bedroom.

 

In contrast, minor repairs that improve the appearance of your home can be done with little expense and offer over 100% return on investment.  These minor repairs should be undertaken before you sell your home, as you will typically get more money back for each dollar you spend on them.

 

Many examples of these repairs were delineated in Section 2, and include:

• Replacing all light bulbs with the highest wattage allowed to bathe the house in light.
• A fresh coat of exterior and interior paint.
• Flowering plants bordering your entryway and by your doorway.
• Trimming hedges.
• Replacement or cleaning of carpets.

Improvements that cannot easily be seen, such as upgrading the electrical or plumbing system will very rarely to never yield anything close to 100% return on investment.

 

A “clean” property inspection report increases a home’s desirability in the minds of potential buyers, many of whom are too busy to focus upon home improvement.  The following repairs will be relatively cheap and result in a higher selling price:

 

Directing water away from the house’s foundation.  The addition of drainage taking water from the downspout and directing it away from the foundation is good for resale and a good preventative measure.  Flexible and cheap drain piping is available at Home Depot.

• Repair all leaky sinks and toilets
• Properly strap the water heater with the 2 - 3 seismic straps now required.
• Clean the leaves out of roof gutters.  This is always mentioned in property inspection reports if it is not done.
• Install smoke alarms in every bedroom.
• Have a wrench by the gas shutoff valve, to turn the gas off in an emergency.
• My handyman can generally assist with these items.

 

A buyer’s first impression of your home is the most powerful and lasting.  If your home lacks “curb appeal,” potential buyers may continue driving past your home without even entering.

 

The following measures can improve your home’s curb appeal for a small investment of money and time, which will yield large returns. Any improvements done for resale should have over 100% return on investments as the following recommendations do.

 

• Plant colorful flowers to spruce up the landscaping
• Trim bushes away from the house and entryway.  Consider removal of trees that block light.
• De-clutter the yard.  Store lawn equipment, children’s toys, and other outdoor items.
• Have your lawn cut every week while your home is on the market.

 

• Repaint the home’s exterior if the paint is over 5 years old.  Painting with a neutral and bright color such as yellow, tan, or off-white works well.  Painting provides an excellent return on investment.
• Power-wash the exterior if the home was recently painted.
• Clean windows both inside and out to give your home a “light and bright” feeling.
• Install new house numbers that are visible from the street.
• Install new hardware such as the lock and knob on the front door, if they appear dated.
• In the front of the house, put out a new welcome mat and a clay pot or wooden box filled with blooming flowers.
• Landscaping, painting, and the minor improvements mentioned above will improve the potential buyers’ first impression of your home and will generally have a greater than 100% return on investment.

Caveat Emptor (Buyer Beware) has been Replaced with Caveat Venditor (Seller Beware)

 

California zealously enforces statutes that require sellers to disclose all material facts that would affect the desirability of their property.  Many lawsuits have been brought by those claiming that the sellers did not fully disclose all that they knew regarding a home.

 

Within these two documents, the seller of a home must disclose information about their property.  All issues are touched upon, from the size of the home and property, to many other issues.  These include:

• Are there any problems with the foundation or any of the appliances?
• Are there any cracks in the walls or sloping floors?
• Has any animal urine ever been on the floor?
• Are there any neighborhood disturbances that should be reported?
• Have any additions been done without permits?

Because California has almost half of all real estate lawsuits in the nation, it is best to fully disclose all information, and have your Realtor assist you with any questions you may have.

 

The precept to follow is when in doubt, disclose.  Your Realtor should be able to assist you in addressing any questions you may have when completing the disclosures.

 

 

You really only have one chance to effectively price your property, and that is when it goes on the market.  The level of interest by potential buyers and other Realtors is highest right when your property comes on the market.  A property that is under-priced will attract a huge amount of attention and a flurry of interest will develop, generally resulting in multiple offers and a sales price above the original list price.

 

A property that is priced at market value will attract a fair amount of interest and will generally receive one or two offers, probably selling for around or slightly below list price.

 

An over-priced property will be quickly reviewed by potential buyers and Realtors and unless a “sucker buyer” comes along to make a bid, this property will sit on the market.  After a month or so, a price drop will attract some residual interest, but with most of the marketplace fixated upon new listings, this price drop may not attract enough interest to receive an offer.  After sitting on the market for two month, one of the following unappealing alternatives must be considered:  another price drop, considering “low-ball” offers, or taking the property off the market.  In the end, over-priced listings generally sell for below what the property would have garnered if initially priced properly.

 

 

The marketplace will find the right price for your home.  Ironically, by under-pricing your home and exposing it to more potential buyers who may fall in love with it, it will likely sell for more than it would if priced otherwise.  Well-priced Palo Alto homes regularly go for $100,000 above list price even in this market.

 

 

By working with a Realtor you maximize your property’s exposure.  Through newspaper and online advertising, Realtor tours, open houses and listing on the Multiple Listing Service your property will be seen by thousands of people in a multitude of mediums.

 

For a comprehensive look at a marketing strategy for your home please see what I offer my clients under Section II of this booklet: “Customized Marketing Plan”.

 

 

If it has been marketed well, after your home has been placed on the market, it will have generated sufficient interest to garner at least one, and hopefully multiple offers.

 

Initial pricing of the home will determine the tenor of the negotiations and affect the relative strength of each party.  If a home is well-priced, the seller can choose amongst multiple offers, and have control over the terms of the contract.  An over-priced home will result in a period of no offers, and the seller may later respond to low-ball offers.  If the seller decided to consider these late or low-ball offers, they are no longer in a position of power; rather, the buyer is now in control.

 

While important, price alone should not be the determining factor in choosing an offer.  Other aspects that must be considered are the specified contingencies and the contingency duration time, the financial strength of the buyers, what proportion of the down payment is being made by the buyers themselves (for example, 100% loan financing is more apt to fall apart), and the number of days requested for escrow.

 

The terms of the contract greatly affect the strength of the offer. 

 

Examples of these terms include:

1. Down payment – the greater the amount in cash, the stronger the offer.
2. “As-Is” – having the buyer sign an “As-Is” addendum generally relieves the seller of doing any future repairs or doing the work found in the pest report.
3. Pre-Approval – a buyer who is not pre-approved for a loan should generally not be seriously considered.  The letter should be completely valid, and should not still require that the buyer/borrower provide asset and employment documentation.  Out of area lenders are very risky, and experience shows that they are difficult to communicate with.
4. Close of Escrow Date – the longer the escrow, the more time for problems to occur.
5. Flexibility – a preferable buyer is one that can tailor their offer to meet the sellers’ needs, such as providing a rent-back to allow for the seller to purchase their next home.

 

 

Contingencies allow the buyer to get out of the contract without any loss or liability. 

 

1. Financing Contingency - Financing contingencies allow the buyer to get out of purchasing the property if either:
   
   • The property does not appraise
   • The buyer cannot get the loan due to any valid reason such as losing their job
   • Interest rates change drastically during the contingency period
2. Property Contingency
   • A property contingency provides the buyer with the greatest escape clause.  If they find any reason that the property does not suit their present or future needs, they can withdraw from the contract.  The withdrawal can be based upon any new inspection findings, a lack of expansion possibilities, or any real concern relating to the property.  This vague contingency gives the buyer the greatest lattitude to withdraw their offer without penalty.
3. Other Contingencies
   • Other common contingencies can range from a contingency to sell the buyers’ previous home to a contingency to allow time for the buyers to locate a home insurance policy.

 

 

After a contract is ratified (signed & accepted), the parties enter into an escrow period where all financing is verified by an independent title company, and title is readied for transfer.

 

The value of your home will generally decline if it “falls out” of escrow, for then the property has a stigma even if the deal falling apart is no fault of the property. 

 

 

1. New Inspection Findings
   • If there is a property contingency, during this period the buyer can order additional inspections.  If new issues are uncovered, the buyer can ask that the seller pay for these repairs or credit the buyer for these additional issues, otherwise the buyer will exercise the property contingency.  At this point, negotiations ensue again.
2. A Low Appraisal
   • If the appraised value of the home is below purchase price, then the buyer may have to increase their down payment.  The lender will only use the appraised value (not the agreed upon selling price) of the home to calculate the maximum loan amount.  Again, further negotiations may ensue.

Escrow problems such as these are rare and can generally be solved by a diligent Realtor and reasonable parties.

 

A title insurance policy is required for both the buyer and the new lender to protect against unexpected claims of ownership of the property.  The insurance guarantees that the buyer/lender receive clear title to the property.

 

The buyer is responsible for the purchase of the title insurance policy that is required by their lender.

 

The person responsible for paying for the buyer’s title insurance varies by county. In Santa Clara County, the seller pays for the buyer’s title insurance.  In San Mateo County, the buyer pays for his title insurance.

 

 

A Guide to Transferring Your Property Tax

 

Proposition 13 started the trend to protect homeowners from being taxed on property appreciation (gain in value).  In 1978, California voters approved a law that only allowed base-year values of real estate to increase 2% per year, therefore keeping owner’s property tax increase at a manageable level.  Unless there was a change in ownership, this property tax could only increase at a rate less than or equal to 2% per year.

 

Because California real estate increases in value at such a rapid rate, many people feared selling their homes because their tax basis would jump up to a much higher amount, even when downsizing.

 

For example:  Let’s say you purchased a home in 1972 for $85,000.  For tax purposes, the value only increased at 2% per year, giving the value of approximately $141,000 in 2005.  You are currently paying a little more than $1,400 in property taxes per year.  The problem people faced was when they went to sell their home and downsize to a new home.  Although you are paying taxes on a $141,000 value, your home will actually sell for $700,000.  You then downsize to a new home and pay $500,000 for it.  So even though you are living in a smaller, less expensive home, your taxes would have increased to 5 times what they were prior to moving.

 

This is why Proposition 60 was created, so seniors could keep their prior, low tax basis and downsize without drastically increasing their property taxes.

 

Proposition 60 is a California law that allows any person who is at least 55 years of age (at the time of the sale of their primary residence) to transfer the base-year value of the original property to a replacement dwelling of equal or lesser value within the same county.

 

Proposition 90 allows transfers to other participating counties, which currently includes Santa Clara, San Mateo, San Diego, Alameda, Los Angeles, Kern, Modoc, Orange, and Ventura.  In order to benefit from either of these propositions, a form must be submitted to the county you are moving to.  At this time it is taking Santa Clara County approximately six months to process requests, so this paperwork needs to be filled out well in advance of selling your property.

 

You are allowed this transferred tax base only once in your lifetime.  However, the legislature has created an exception if a person becomes disabled after receiving the property tax relief, and the person may transfer the base-year value a second time because of the disability.  A separate form for disability must be filed.

 

To qualify for Proposition 60 you must be 55 years of age or older (only one spouse must be 55 years of age or older).  Secondly, you must file a “Claim for Base Year Value Transfer” with the Recorder and Assessors office for the county you live in.  I can help you with this process before listing your property.  The Recorder and Assessors office will then issue a supplemental assessment notice that will transfer your base year value to the new residence.  The lower base year value cannot be transferred until the original home is sold; so if the replacement home is purchased first, there may be a period when you will have to pay the higher tax; but only until you sell your first residence.  You will also receive a refund check to help you pay the higher taxes until the next full tax year when your former base year value will appear on the regular bill.

 

• The replacement property must be the owner’s principal residence.
• The seller of the original residence, or a spouse residing with the seller, must be at least 55 years of age as of the date that the original property was sold.
• The replacement property must be of equal or lesser “current market value” than the original.
• The replacement property must be purchased within the same county.
• The replacement property must be purchased or constructed within 2 years (before or after) of the sale of the original property.
• The owner must file an application within three years following the purchase date or new construction completion date of the replacement property.
• This is a one-time only filing.
• In most instances, if more than one owner of an original property is eligible for Proposition 60, they must choose among themselves which one will use the benefits.

 

Question:  If I sell my current residence, can my replacement property by in any county of California and still be eligible for Proposition 60/90?

Answer:  No.  In order to be eligible for Proposition 60 benefits your replacement property must be in the same county.  In order to be eligible for Proposition 90 benefits, your replacement property must be in one of the following counties:  Santa Clara, San Mateo, San Diego, Alameda, Los Angeles, Kern, Modoc, Orange, and Ventura.

 

Question:  Can a taxpayer apply for and receive the benefit of Proposition 60/90 numerous times during the course of his/her lifetime?

Answer:  No.  Only claimants who have not previously been granted this property benefit are eligible.  This is a one-time benefit.

 

Question:  Is it true that only one claimant need be at least 55 years of age as of the date of the sale of an original property in order to qualify?
Answer:  Yes

 

Question:  If I get Proposition 60/90 benefits will I still have to file for a Homeowners’ Exemption on the replacement property?

Answer:  Yes.  You must file for a Homeowners’ Exemption on the replacement property.  It is not granted automatically.

 

Question:  If we are getting divorced can we split the benefit of Prop. 60/90?

Answer:  No.  Only one Co-Owner may receive the benefit, and the Co-Owners must determine this between themselves.

 

Question:  What is meant by “equal or lesser value” of a replacement property?

Answer:  It depends upon when you purchase the replacement property.  In general, “equal or lesser value” means one of the following:

• 100% or less of the market value of the original property, if the replacement property is purchased prior to the sale of the original property.
• 105% or less of the market value of the original property, if the replacement property is purchased within the first year after the original property is sold.
• 110% or less of the market value of the original property, if the replacement property is purchased within the second year after the original property is sold.

 

Question:  When making the “equal or lesser value” test comparison, is a simple comparison of the sales price of the original property to the purchase price of the replacement price all that is needed?

Answer:  No.  The comparison must be made using the full market value of the properties.  This is not determined by sales or purchase price because sometimes that is not indicative of fair market value.  The Assessor must determine the market value of each property, which may differ from sales price.

 

Question:  Can a claimant transfer the base tax from the original single family home to a replacement duplex or multi-unit residence (living in one unit and renting the others)?

Answer:  Yes.  The owner could carry the factored base year value of the original property to that portion of the replacement parcel that is his/her principal place of abode, and the land that constitutes a reasonable size to embody a site for the residence.  However, that portion comprising the abode must be of equal or lesser value than the original property.