Some first time home buyers in the San Jose or Silicon Valley area get confused by the “assessed property value” of houses, condos, or townhouses: they mistakenly think that this number has some bearing on the real estate market value.  It doesn’t.  The assessed value is used only for determining the amount of property tax being paid.

Residential real estate in California is reassessed upon transfer of title, or change of ownership, in most cases (there are some exemptions). From there, the assessed value can only go up 2% per year at most (thanks to the passage of Proposition 13 in the 1970s).  When property values decline, as they have recently, owners of properties with higher than market value assessments can appeal and get a temporary rollback in valuation for the purposes of having property taxes lowered.  This is very very common (and even so, the assessed value is usually still off as it’s based loosely on the January values of that year – the values are often higher than market value for these petitioned properties).  The tax assessor’s office has a lot of latitude in determining the assessed values; it is nothing at all like an appraisal, which should use strict comparisons.

Let’s look at a few hypothetical examples, taking tract housing with the same square footage, layout etc:

1 – If a couple purchased a Cambrian Park house in 1960 to 1970 and paid $20,000 for that property, but today’s value is approximately $500,000, the property tax being paid will reflect the long term ownership and won’t be based on the current market value.  That couple might be paying $600 to $800 per year in property taxes with a corresponding “assessed value” of about $52,000. (more…)

In most of California, the purchase agreement form used when writing an offer to buy residential real estate is the California Association of Realtors (CAR) form, the Residential Purchase Agreement (CAR-RPA).  Along the San Francisco Peninsula and in Silicon Valley, though, often we use another form, the Peninsula Regional Data Service purchase agreement (PRDS contract).  Few consumers know that there is a choice of forms to use when buying Silicon Valley real estate.

Does it matter which one you use?  It certainly does!

While anything in the boilerplate can be modified (deleted or added to), the basic text is not identical from one to the next, and neither are the ramifications to buyer and seller. Here are a few examples:

- Property condition: one is an ?”as is”? contract and the other requires that the property be delivered with a warrantee of condition (no leaks, no cracked glass, no structural defects in chimneys, all systems operational, etc.)

- Repairs in escrow: one says that repairs must be by a licensed contractor, the other that repairs must be done in workmanlike manner (can be done by anyone)

- Defaulting: one contract has more ”teeth” with buyer or seller defaults than the other

There are pros and cons to each of these two forms. A skilled agent is ?”bilingual”? in both, understands the strengths and weaknesses of each one, and can modify as needed the form to benefit the client.  Let’s look at some examples of why it matters.

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In case you haven’t heard, there is a wonderful opportunity right now for qualified home buyers in Santa Clara County to enjoy both the state AND federal tax credits.  But this is truly a “limited time offer” and only applies to sales happening in April.  There are about 10 days left, so get into escrow now and enjoy a rare & wonderful chance to get Uncle Sam’s help with your home purchase!

My alma mater, Saratoga High School in Saratoga, CA, just launched a student-made video about the school.  In interviews of students, faculty, and staff, many of the plusses of being a part of that community are brought out.  Film footage shows the cinderblock construction that was equally ugly in 1977 (when this local blogger graduated), but made clear that the school is about the people, not the architecture and paint color.  That part has not changed in the last thirty years, while the campus has become more sophisticated and now sports a great-looking theater for its star class performances.

This is a nicely done video and is worthwhile viewing for anyone thinking of enrolling at Saratoga High, or of having their kids enroll there.

Saratoga High School:
Why students, teachers, and staff love working here

Go Falcons!

Thanks for your patience during our transition from this blog’s old home to WordPress. There have been a few challenges and we regret the downtime and any inconvenience to you! There seem to be a couple of remaining bugs but it’s hoped they’ll be short-lived. We expect to be getting back to the business of blogging about San Jose (Almaden and Cambrian especially) and Los Gatos real estate in the next couple of days.

Again, thank you for your patience as we complete this move!

Warmest regards,

Mary Pope-Handy

PS Meanwhile, please feel free to check out my other sites and blogs:

www.PopeHandy.com www.ValleyOfHeartsDelight.com www.LiveInLosGatos.com