Billionaire's Los Altos Hills mansion loses $50 million value?

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Real Estate Broker/Owner with Catarra Real Estate, Inc CA BRE #01191946

Yuri Milner billionaire mansion Los Altos HillsThe Santa Clara County Assessor, Larry Stone, has determined that the value of Yuri Milner's 25,545 square foot mansion in Los Altos Hills is worth $50,270,000 - almost exactly half of the price reportedly paid in Spring 2011.  Stone is quoted as saying "He paid more than fair market value."  I disagree.

How does one determine fair market value on a home that is essentially...unique.  While there are plenty of homes across the state with valuations in a similar price range, because the properties are in different markets and geographies it would be nearly impossible to establish an accurate valuation using conventional appraisal methods.  The valuation of a unique product in a market by itself is exactly what the buyer will pay for it - nothing less.

There are so many factors that go into evaluating the market value of a home of this type, beyond the typical parameters.  The materials and craftsmanship far outstrip the typical measures used in other luxury homes.  It's an engineering marvel worthy of whatever price was paid.

The property taxes on the home, based on the $100 million purchase price, would have been $1.2 million and a portion of that would go to local schools.  Districts are all in need of cash so the reduction will be a blow to the Los Alos School District. 

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  1. Rosemary Brooks 07/04/2012 03:28 PM
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Ambassador
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Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Bryan - I can't imagine the challenges of actually appraising a home like that - at that level, so much becomes a matter of subjectivity. And I wouldn't think that any assessor anywhere in the country really has the resources to take on that job. I completely agree that it's hard to argue against the supposition that the market has spoken and the transaction in fact identified the value.

Jul 04, 2012 03:20 PM #1
Anonymous
Anonymous
Anonymous

Yes this is way above my imaginary thoughts to even "visit" a home like this.  I would not venture to challenage any expert in their report of what this one is worth, what it lost or any future values. I mean really?

Jul 04, 2012 03:25 PM #2
Rainmaker
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Eva Aliaga
Keller Williams Realty Boca Raton IdealFloridaLiving.com - Delray Beach, FL
South Florida Real Estate - Boca Raton Real Estate

Well I guess that's good news for Yuri - he pays less taxes, but not good for Santa Clara County or the schools that could have used that money.

Jul 04, 2012 04:14 PM #3
Rainmaker
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Jenny Durling
L.A. Property Solutions - Los Angeles, CA
For Los Angeles real estate help 213-215-4758

All I can say, is that if I had that much money, I would NOT buy one rediculously large house with it! This guy apparently has more money than he knows what to do with.

Jul 04, 2012 05:10 PM #4
Rainmaker
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Debbie Gartner
Floor Coverings International Westchester NY & Stamford CT - White Plains, NY
The Flooring Girl - Westchester hardwood flooring

Yes, this doesn't seem right at all.  It really seems like someone is trying to cheat the system.

Jul 05, 2012 02:08 AM #5
Rainmaker
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Jane Peters
Power Brokers Int'l - Los Angeles, CA
Connecting you to the L.A. real estate scene

I presume he paid all cash for it and it was never appraised.  If it was, what was the appraiser smoking at that time :)

Jul 05, 2012 02:23 AM #6
Rainmaker
571,232
Hella Mitschke Rothwell
(808) 226-1095 or (831) 626-4000
Hawaii & California Real Estate Broker

Bryan: In California, it should be 1% of the purchase price. The buyer must have fought for that reassessment to get his annual payment down. But he must have known he was going to do that when he OVERPAID for it.

Jul 06, 2012 09:59 PM #7
Rainmaker
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David Ames
Zephyr Real Estate, San Francisco - San Francisco, CA
San Francisco

Hella Rothwell took the words right out of my mouth regarding the reassessment.  and, as Jane said, he probably paid all cash and didn't have an appraisal.  Why bother at that point.  Like you said, "The valuation of a unique product in a market by itself is exactly what the buyer will pay for it - nothing less." 

Jul 18, 2012 02:18 PM #8
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Bryan Robertson

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