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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Comments 8 New Comment

Rainmaker
233,907
Jenny Durling
For Los Angeles real estate help 213-215-4758
L.A. Property Solutions

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.

July 04, 2012 05:10 PM
Rainmaker
1,491,010
Debbie Gartner
The Flooring Girl - Westchester hardwood flooring
Floor Coverings International Westchester NY & Stamford CT

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

July 05, 2012 02:08 AM
Rainmaker
863,694
Jane Peters
Connecting you to the L.A. real estate scene
Power Brokers Int'l

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

July 05, 2012 02:23 AM
Rainmaker
565,341
Hella Mitschke Rothwell
Hawaii & California Real Estate Broker
(808) 226-1095 or (831) 626-4000

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.

July 06, 2012 09:59 PM
Rainmaker
234,214
David Ames
San Francisco
Zephyr Real Estate, 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." 

July 18, 2012 02:18 PM
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Additional Information

Read about news, reviews, and commentary about current events and trends in the real estate industry. I also write about local markets including Silicon Valley and my hometowns - Los Altos and Saratoga.