The DeLeon Insight - July 2016

The DeLeon Insight Silicon Valley Real Estate Local Specialization

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Global Reach

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Integrated Approach Jul y 2016

SUMMER SPLASH 2016

• Insider Tips to Selecting the Right Agent to Sell Your House • Neighborhood Spotlight: The Circus Club Area of Atherton How to Successfully Organize Your Home • Surprisingly Simple Suggestions for Sellers ©•2016 DeLeon Realty - DeLeon Insight July 2016 1 www.deleonrealty.com

The DeLeon Update: Market Trends Average Sales Price 2015 & 2016

01/2015 - 06/2015

01/2016 - 06/20/2016

Average sales price for single-family homes from 01/01/2016 to 06/20/2016 compared to a similar period in 2015.

Average Price/Square Foot 2015 & 2016

01/2015 - 06/2015

01/2016 - 06/20/2016

Average price per square foot for single-family homes from 01/01/2016 to 06/20/2016 compared to a similar period in 2015. *Data gathered from the Multiple Listing Service on 06/20/2016

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Neighborhood Spotlight: The Circus Club Area of Atherton By: Ken DeLeon, Esq. DeLeon Founder

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hree words describe the posh Circus Club neighborhood of Atherton: exclusive, impressive, and luxurious.

Historically, this neighborhood was a 600-acre private ranch of moneyed Massachusetts businessman, Faxon Dean Atherton. It has since grown into one of the most expensive neighborhoods in the country. Where Mr. Atherton’s home was once situated is now the Menlo Circus Club, a private country club for wealthy equestrian aficionados and socialites.

The streets of West Atherton are wide and spacious, lined with heritage oaks, cedars, and pines. Like other Atherton neighborhoods, there are no sidewalks in West Atherton, giving it a provincial vibe.

The rows of privacy hedges and fancy gates offer mere glimpses of the magnificent manors to the passers-by, and the more grandiose estates, despite their gates and hedges, still manage an imposing street presence.

Within West Atherton, the most soughtafter section is referred to as the Circus Club area and is made up of prestigious streets such as Park Lane, Camino al Lago, and Camino de los Robles. Here, you will find many fine estates and compounds tucked privately at the ends of long driveways that

branch off meandering country roads. For many residents, this is the neighborhood of choice.

The make-up of the community continues to rapidly change as more of Silicon Valley’s prominent executives and investors move in. On nearly every street is a construction site for the next lavish mansion soon to rise. The old Ranch-style homes are steadily disappearing as younger homeowners move in.

The demand for homes in West Atherton is so high that even in the recent economic downturn, a tear-down property here still

sells for around $5 million. But, as with any luxury home market, buyers are highly discretionary and consider these homes as less of an investment and more of a showcase.

Homes here tend to be unique and have greater value fluctuations, with the homes located on the edges of West Atherton selling for as much as eight percent less than those along the prime central streets.

You could buy a home for $1 million less than its original asking price, but you will probably still end up paying close to $8 million.

Visit 202CaminoAlLago.com for a full video tour

© 2016 DeLeon Realty

- DeLeon Insight July 2016 3

DeLeon Realty’s Summer Splash By: Michael Repka, Esq. DeLeon CEO/Managing Broker

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uyers often say they would like to purchase a home over the summer and settle in before the new school year starts. Nevertheless, the majority of listings are brought onto the market during the two seasonal windows of spring and fall. In effect, the summer becomes a “dead time” in large part because of a self-fulfilling prophecy. Namely, Realtors® believe there will not be enough listings on the market to keep buyer attention, so they advise clients to wait until September to list.

Generally speaking, this is good advice.

The steady flow of new listings during the busy spring months of March and April and the fall months of September and October keeps buyers constantly checking the newspapers and the MLS. As the number of listings dies down, so does the buyer

interest. There still are plenty of buyers out there, but it requires an extremely aggressive marketing campaign to jolt them out of hibernation.

As Silicon Valley’s dominant market leader, the DeLeon Team has the ability to change the market to give buyers what they want—a selection of great homes that will close before the new school year begins.

Last year, we launched the inaugural DeLeon Summer Splash, which was a tremendous success. This year, we have decided to expand the program. In a blatant attempt to attract more attention from buyers, we are offering a free 3-year maintenance plan to all buyers who purchase one of our Summer Splash listings.

This annual, cost-saving maintenance covers many time-consuming tasks, including: 1) cleaning gutters and downspouts, 2) cleaning exhaust vents and filters,

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3) checking toilet operations, 4) checking smoke and carbon monoxide detectors, 5) removing tree branches, 6) maintaining water heaters, 7) replacing HVAC filters, 8) pressure-washing parking areas, 9) lubricating garage door systems, ...and much more!

This incentive applies irrespective of whether or not the buyers use a DeLeon agent to represent them in the purchase.

If you are interested in buying a home this summer, make sure you check out all of our fantastic listings that we will bring in the market during the Summer Splash weeks. You can see many of these properties in this newsletter, or you can ask any licensed real estate salesperson or broker.

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Selling your home?

F i rs t, m e e t w i t h M i c h a e l R e p ka .

Meet with Michael today for tax and legal advice before listing your home.

Unlike most real estate agents, Michael holds two law degrees and has years of experience as a real estate and tax attorney, giving his clients a unique advantage as most other brokerages do not provide an in-house attorney to help clients. In addition, the expertise and marketing available through the team at DeLeon Realty are the very best in the business. Meet with Michael to discuss any preliminary tax and legal questions about selling your home and let him tell you more about what makes DeLeon Realty’s innovative approach to real estate so successful. There is no cost or obligation for this consultation. However, homeowners who have a current listing contract with another agent are excluded.

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- DeLeon Insight July 2016 5

Insider Tips to Selecting the Right Agent to Sell Your House By: Michael Repka, Esq. DeLeon CEO/Managing Broker

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hoosing the right real estate agent to list your home is a big decision.

Clients are often asked to enter into a long-term contract for the sale of their single largest asset with few specifics and no guarantees. That said, there are some key questions to ask candidates to help you find the right real estate agent.

Background, Experience and Statistics Experience matters. There are many moving parts to a listing, so it takes experience to get it right and anticipate issues or opportunities. An experienced agent will know how to prepare and market your property in a savvy manner, getting the best price possible. Plus, agents who handle a large number of listings each year often receive priority pricing and service from contractors and other professionals, resulting in a savings for the client.

All Realtors® have ready access to statistics and data and should be able to provide

prospective sellers with personal statistics, such as: • Number of homes sold in the area (ask for an MLS printout for the past 5 years) • Average price per square foot • Average days on the market • Average price above or below the initial list price House Preparation The ability to see a home’s potential and make cost-effective improvements is another benefit of listing with an experienced agent. With time and cost constraints in mind, an agent with a strong team and quality connections can give your property an advantage over listing with a less experienced agent. Asking for “before and after” pictures of homes and their vendor connections can help demonstrate an agent’s work firsthand.

Will They Double-End? Under California law, the same individual agent is permitted to represent both the buyer and the seller on the same real estate

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transaction; in real estate parlance this is called “double-ending.” However, this can lead to conflicts of interest and the potential for significant financial damages to the client. Real estate attorneys are all too familiar with situations when doubleending listing agents violated their fiduciary duty to a client, either tempted by the lure of a double commission or an inability to anticipate complications. Although theoretically possible and certainly legal, it is difficult to imagine how an agent can zealously advocate for both clients while protecting confidential information. Thus, asking about an agent’s policy on doubleending is important and will enable the parties to enter the listing with their eyes wide open.

At a recent panel, the manager from another real estate office proudly touted his office’s policy, which is that the listing agents must stop advising their clients and switch to the buyer side as soon as they know one of their buyers is going to submit an offer.

Under this system, the manager then steps in to review the offers with the sellers and

advise them on how to proceed.

While some sellers may feel abandoned by their agent in this case and object to being advised by someone who doesn’t know the property, competing properties, or the sellers’ situation, other sellers may be willing to accept this solution because they like their agent and want them to get twice the commission.

Needless to say, at DeLeon Realty, we make sure the same individual agent is never advising both the buyer and the seller on the same transaction. Also, the listing agent never receives any additional compensation based on which offer gets accepted.

Marketing All agents can say they “invest heavily” in marketing their listings, but what does that mean? An experienced agent should be willing and able to give a detailed plan, including: • how many and what size ads will the agent run (and in which publications) to promote the property each week of the listing contract? Ads may seem expensive, but they are an effective tool in drumming up interest in the property. Generally, agents cover 100 percent of these costs, so some agents shy away.

• what will the brochures look like?

Professionally printed in full color? Two pages? Four pages? 32 pages?

• which photographer will be used?

• will the agent advertise the property on TV? Television commercials are a very powerful way to reach potential buyers who are not actively searching the MLS. • will there be a professional video tour (versus a photo-only virtual tour) and, if so, which production company will be utilized?

• what will the property website look like?

• what is included in the agent’s online marketing campaign?

• what does the agent offer at open houses to increase attendance?

• how will they reach the international community?

While these are only a few of potential marketing techniques, agents who are willing to answer these types of questions with specificity tend to invest more time and money in promoting their properties.

Simply put, agents who give non-committal answers are less likely to get quality results.

Length of Listing Contract Savvy sellers may want to avoid signing long-term listing contracts because some

agents are less aggressive if they know that they have the sellers locked in for an extended period of time. A shorter contract period, however, can serve as a motivating factor for the agent. In most circumstances, a properly prepared and marketed home in this area should sell within 45 days, so a healthy listing agreement term is often 60 days or less (generally, agents request more time if in the hills or at higher price points).

An agent with a shorter contract will have additional incentive to perform well because satisfied clients will be happy to relist the property with the same agent even if the home doesn’t sell. The DeLeon Team only requests 39 days, starting on the day the home hits the MLS. As with selecting a buyer agent, it is wise for the selling client to interview several agents before making a choice. Providing each agent with the same questions will enable the potential seller to better compare and contrast the agents in a neutral fashion.

Don’t accept scripted or canned answers.

This up-front time may seem like a hassle, but the dividends will more than pay off in money, time, and avoided stress.

© 2016 DeLeon Realty

- DeLeon Insight July 2016 7

How to Successfully Organize Your Home By: Tilu Arora Interior Designer

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elieve it or not, organization can boost your home’s value significantly.

Properly and attractively sorting your interiors will serve both to impress prospective buyers and to demonstrate the functionality of your home.

Have you ever envied the crisp, clean interiors of homes featured in design magazines or on home improvement websites? Most people think they have to invest in new paint or new furniture and accessories to achieve these showcase-worthy looks for their own homes.

However, you can easily achieve this look by simply presenting your surroundings nicely and keeping your interiors organized and clean. Here are a few tips to help you easily obtain those picture-perfect interiors.

1.) Designate Extensively.

Designating spaces for everything in the house will help you achieve an elegant, orderly home. Besides keeping your home presentable, this will also save you from wasting valuable time digging around for your keys, searching for the scissors, or trying to remember where you put last year’s holiday wrapping paper.

So, assign a place for each item, and then organize all items by category. If you can’t find spaces for all your loose items, shop for inexpensive drawer or cabinet organizers to maximize your storage areas.

2.) Purge Regularly.

Many homes provide enough storage to accommodate the needs of a single family, but this is not always the case. If you feel your home is lacking in storage capability, first de-clutter each area, then sort through your possessions.

It will help to throw away or donate anything you own that hasn’t been used in a long time.

We also recommend combing through your closets and drawers every three months to keep things from getting out of hand.

3.) Invest Thoughtfully.

Many people spend short bursts of energy in organizing their homes, which often involve running to the store and buying a bunch of organization materials they end up never using because they do not properly fit the space or fulfill the intended purpose.

To avoid this, plan ahead by first looking at options online for what you want to achieve. Then, after you have researched the sizes and functions of your options, you can make an informed purchase. This will help you shop more efficiently while ensuring you get the most use out of your purchases.

Additionally, search for storage solutions that complement your interiors. Invest in well-made furniture pieces that have storage abilities but also display attractive designs that accent your décor.

If you have spaces with open shelving, consider purchasing tasteful baskets or color-coordinated storage bins.

4.) Research Thoroughly.

Many people want to achieve an organized household but either can’t find the time or can’t determine the proper remedy. Don’t be afraid to seek professional help. You can hire an organizational expert, or visit a store that carries home organization items, as these stores usually have consultants who can visit your home for free if you buy their products.

You can also find very informative guides either online or in book form, like Marie Kondo’s The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing. Getting outside help will motivate

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you to overcome organizational tasks that might seem impossible.

Even if you’re not planning on immediately selling your home, making adjustments now to your organizational habits will help your home appear welcoming and well-kept on a day-to-day basis. This will also keep you prepared for when the time comes to pack up and move to your next home.

Spending time every day to pick up and organize your belongings can seem difficult given our busy lifestyles, but if you are properly organized, this maintenance will be simple. Besides, once you experience the satisfying effects of organized living, you will not want to live any other way.

Surprisingly Simple Suggestions for Sellers By: Brittney Andrews Interior Designer

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t is no secret that home improvements can add value to a home. While preparing dozens of home listings, we have witnessed well-prepared homes sell sooner and for more money than nearly identical homes listed concurrently. But the value is not entirely in the dollar invested or even the square footage. In fact, extensive renovations may actually result in a loss.

In our experience, surefire multipliers are basic upgrades that enhance the perceived (versus the actual) value of a home, and create an appealing overall package. The following are a few priorities in descending order of importance that will optimize returns.

Cleaning Sellers leave the best impression by leaving nothing behind. De-cluttering and deep-cleaning take top priority as removing personal items (photographs, clothing, personal care items, and even art) will allow potential buyers to imagine their life unfolding in the home. Cleaning might include appliances, carpets, windows, grout, or stone where necessary (even soot from the back of fireboxes), and power-washing mossy or discolored exterior pathways and walls. The full process might take a crew of professionals a day or two and may even require a hauler, but the result will be an uncluttered home that shines.

Potential Pitfalls: Avoid using acidic chemicals or abrasives that might damage delicate surfaces (e.g.,

natural stone or stainless steel).

Repairs Homes in move-in-ready condition appeal to homebuyers, so it is a good idea to fix what is broken, even if buyers may want to make changes later. Re-grouting loose pavers, lubricating sticky locks, and replacing missing fence boards are a few actions sellers might consider.

Potential Pitfalls: Removing outdated security, telephone systems, or TV antennae may be too costly to provide a return.

Paint Paint can create the most dramatic visual improvement for a relatively low cost. A professional paint job can increase a home’s value in several ways. It can provide a fresh, updated color scheme while erasing scuffs, repairing cosmetic cracks, and brightening old surfaces. Sellers should consider selecting a limited palette of harmonious and neutral colors.

For rooms that need only minimal brightening or updating, consider focusing new paint on dingy cabinets, yellowed canlights, sooty fireplace bricks, and worn floors in garage, basement, and exterior areas.

While extensive exterior paint can look nice, sellers can often achieve adequate results by power-washing the exterior and painting only exterior trim and doors.

Potential Pitfalls: While it may be tempting to use bold or cheerful hues, neutral paint colors (like grey or beige) tend to layer easily, photograph elegantly, and offer universal appeal, so they

are highly recommended for home-selling.

It is also advisable that you remove wallcoverings before painting a room to avoid causing visible seams and bubbles.

Landscaping Curb appeal is how a home makes its first (and last) impression on a buyer, and the backyard should not be overlooked as a valuable extension of the home. Sellers might aim for an inviting, lively, and wellmaintained appearance by manicuring, weeding, and watering plants, refreshing pots, garden beds, and mulch, and removing trash or items like grungy basketball posts or play structures.

Backyards can also be great opportunities to appeal to a target market by presenting grassy play areas for children, patios and decks for indoor/outdoor living, or native plants and low-water landscaping. Trimming back trees to show off views can also add value, while grouping plants of the same color creates eye-popping clusters of color.

Potential Pitfalls: Depending on the scope of work and level of skill required, a regular gardening service, landscaper, or landscape architect should be consulted for best results.

By completing these relatively easy tasks, you can make your home feel and appear warm, attractive, and revitalized. The harmonizing effect of these new features will simultaneously entice buyers while assuring them that their prospective new home has been lovingly maintained, and they will be even more likely to make you a desirable offer.

Š 2016 DeLeon Realty

- DeLeon Insight July 2016 9 

Real Estate Agent Rankings: How Can So Many People Be “Number One”?

By: Michael Repka, Esq. DeLeon CEO/Managing Broker

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he real estate industry is full of people claiming to be “Number One.” These claims often vary, but the variation is often nuanced. For example, the claims can range from Number One Team in America, Number One Individual Agent in Menlo Park, Number One Brokerage in America (based on number of agents), Number One Brokerage in America (based on total sales), to Number One Brokerage in Palo Alto.

From there, the claims get much more focused, like Number One Agent in My Office, or Number One Left-Handed Agent in My Office Based on Transactions with Less than Two Bathrooms. It is easy to see how the claims can get silly.

To understand these claims, one must understand the way the real estate industry is structured. There are two overarching considerations: how the brokerage is structured, and how the agents interact, if at all.

How the Brokerage Is Structured Generally, brokerages fall into one of many different categories. For example, there are large brokerages that operate independent franchises all around the

country (such as Coldwell Banker, Keller Williams , and RE/MAX), regional brokerages that operate primarily throughout the Peninsula or the Bay Area (such as Alain Pinel and Intero), and boutique brokerages that focus on a tight geographic area (such as DeLeon Realty).

The brokerages offer different levels of training and supervision, ranging from very little to comprehensive one-on-one mentoring or intensive structured programs.

Unlike most industries, most brokerages face little or no cost to bringing an agent onboard, albeit as an independent contractor, not an employee. In fact, many offices charge a monthly fee to the agents so the brokerage actually makes a small amount of money even if the agent never completes a transaction. The monthly fees often cover things such as desk rent, professional liability insurance, computers and websites, and can run from practically nothing to almost $2,000 per month. Thus, some agencies are very liberal about giving people a chance with the hope that they may sell some homes or learn on the job.

Generally, offices with higher monthly fees pay higher portions of the gross commission to their agents so they tend to attract more experienced, higher-producing agents, whereas part-time agents tend to favor

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offices with lower fees.

Therefore, when a brokerage claims to be Number One, be it Coldwell Banker nationally or Alain Pinel in Palo Alto, they are using an aggregation of all the sales made by all of their independent contractor agents. On the other hand, when Keller Williams touts itself as Number One, they are basing it on entirely different criteria, like the total number of independent contractor agents they have nationwide.

How the Agents Interact Every year, the Wall Street Journal publishes a list compiled by Real Trends, Inc. This is the seminal list that ranks the sales of individual agents or integrated teams. The focus is upon the various people and resources available to the client—or, in other words, the salaried people hired to further the goals of the team and the client. Generally, this is the most important ranking because it is the fairest gauge of the client experience.

The rankings referred to in this article are per the 2014 REAL Trends/Wall Street Journal rankings. By the time this article is circulated, new 2015 rankings will have been released.

Work with the innovator! List your home with

DeLeon Realty

DeLeon Realty will cover all of the following at no additional charge: Staging* | Property Inspection | Pest Inspection *Includes: Design, Installation, 1 Month of Furniture Rental and Removal Our clients love the personal attention they receive from Michael Repka, from beginning to end.

Additionally you will receive a suite of free services from the DeLeon Team, including interior design, construction consulting, handyman work, and dedicated marketing to local and foreign buyers.

®

650.488.7325

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www.deleonrealty.com

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DeLeon Realty CalBRE #01903224

© 2016 DeLeon Realty

- DeLeon Insight July 2016 11

Do You and Your Agent Know About FIRPTA? By: Michael Repka, Esq. DeLeon CEO/Managing Broker

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ne of the fortuitous things about running the listing side of the DeLeon Team is the exposure to the international real estate market. It is widely acknowledged that the DeLeon Team leads all Silicon Valley agents and teams in marketing to the international community.

Our efforts in this arena have taken Ken DeLeon and me to India, Russia, Singapore, Taiwan, Hong Kong, and mainland China on many occasions. In addition to marketing our listings, these trips have given us the opportunity to meet with foreign government officials and real estate industry leaders in an effort to better understand the rules, customs, and practices to which many foreign buyers are accustomed.

One of the first things that surprises many foreign nationals is how easy it is for them to buy property in the United States. Unlike many other countries, foreigners can buy U.S. real property, provided there is no vital national security interest involved. While media reports of waning interest from Chinese buyers abound, our experience

paints a different picture. International buyers still comprise a significant portion of the buyer pool, particularly with luxury homes.

Although the U.S. government does not impose rules that discourage foreign ownership of U.S. real property, it is concerned about getting its tax on the gains from sale of this property. It is not hard to imagine that a foreign national, with no ties to the U.S., could forget to file their tax returns after all of the funds have been wired to them overseas. In an effort to enforce U.S. tax laws, Congress enacted the Foreign Investment in Real Property Tax Act of 1980 (IRC §§ 897 and 1445) to ensure that foreign buyers of U.S. real property pay their taxes.

The FIRPTA rules apply whenever a foreign person disposes U.S. real property interest. The rules provide that the withholding agents, generally the transferees/buyers, remit a portion of the total sales price to the U.S. government rather than to the sellers. If they fail to do this, then the buyers can be held liable for this amount. Historically, the rate has been 10 percent of the gross sales price (i.e., the total amount that the sellers received,

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including the assumption of debt), but this was recently increased to 15 percent for dispositions on or after February 17, 2016.

None of this should be a big deal from the point of view of the buyers. After all, the buyers still pay the same amount; it is just that 85 percent goes to the sellers and 15 percent goes to the U.S. government until the sellers file their tax returns.

However, this situation almost derailed a recent transaction in which I was the listing agent. In that case, the buyers were represented by a very experienced real estate agent from a large regional brokerage. The buyers worried about possible liability associated with the FIRPTA withholding on the transaction. Neither the agent nor the agent’s manager was familiar with the details of the FIRPTA rules.

Fortunately, I was able to provide a detailed written explanation to the buyers, and DeLeon Realty took the extraordinary step of indemnifying the other brokerage’s clients against any adverse action by the IRS. Although this particular transaction closed smoothly, it is but an example of how these types of laws can jeopardize a transaction if not thoroughly understood.

Tax Tips: Installment Sales and Deferred Sales Trusts By: Michael Repka, Esq. DeLeon CEO/Managing Broker

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axes stink! No one likes paying them, especially sellers of highly appreciated Silicon Valley property. This is particularly true now that the combined federal and California tax rate on longterm capital gains can reach as high as 37.1 percent thanks to California’s Prop 30. This doesn’t even take into consideration any additional revenue the federal government may need to construct the Great Wall of Texas—just in case the Mexican government pushes back on the idea of them paying for it.

Sure, there are some easy answers to reduce homeowner taxes, such as excluding $500,000 in gain under the primary residence exemption (I.R.C. § 121) or every real estate agent’s favorite idea that may not work under many sellers’ circumstances: convert your home into rental property and then do an I.R.C. § 1031 transaction.

Alternatively, some tax-adverse sellers may resort to listing with a bad real estate agent who does not do much to prep or market the home so as to keep the sales price low.

However, this article will look at two very powerful, albeit less humorous ideas that are probably underutilized: (1) the installment sale, and (2) the deferred sales trust.

Installment Sale Under the installment sale rules, taxpayers are permitted to defer the recognition of tax in situations in which at least some of the money is received after the tax year of the sale. In other words, the United States and California impose tax on sellers as the money from the sale is received, not the year in which the sale is made.

A simple example of this is the sale of a house for $5 million structured so that the taxpayer receives $2 million in 2016 plus $300,000 each year for the next 10 years (plus interest, of course). The taxpayer would recognize a significant amount of gain in 2016, but the gain on the deferred

amount would not be recognized until received.

Not only will the taxpayer defer the tax on a significant amount of gain, but most taxpayers will also pay tax at a lower blended rate thanks to the graduated capital gains tax rates.

This technique can be particularly useful in Silicon Valley because there are a large number of buyers from foreign countries, such as China, Vietnam, and Iran, who are quite wealthy in their countries but are facing delays as a result of the currency migration rules. As a result, these buyers may be willing to pay more for their new homes, plus interest as high as 6 percent, if the seller is willing to hold a note for a portion of the sales price.

If organized properly, this can be a very safe structure. However, it requires careful analysis of several key factors before embarking down this road. Naturally, DeLeon Realty will prepare the necessary legal documentation, including the note and deed of trust, and perform all other related legal work, free of charge for our clients.

Deferred Sales Trust While the installment sale treatment may be fantastic under the right circumstances, it may not work with every buyer. Ultimately, the installment sale structure requires a buyer who wants to structure the deal in this way and who is a good credit risk with a very substantial down payment (e.g., 40 percent). Attempting to do an installment sale in the wrong circumstances can be disastrous and should only be attempted if you are working with a real estate agent who

can address all of the tax and legal issues that could arise.

The good news is there is an alternative that may be of more broad application: the deferred sales trust. Although there are a few different versions of this structure, they are fairly consistent in approach. First, the homeowners transfer the property into an irrevocable trust which is managed by an independent trustee. This independent structure is important because the seller must avoid constructive receipt of the sales proceeds.

The arrangement is structured so that property is sold and then the proceeds are invested by a money manager. Naturally, like most investments, there is a wide variety of financial investments, which range from very safe to very aggressive. The proceeds are then dispersed to the seller over a structured period of time.

The beauty of this structure is that the sellers invest the entire pre-tax deferred amount and, therefore, enjoy a higher return. Additionally, they can take advantage of the graduated capital tax gains rates by spreading the gain over a number of years.

There is no “right” answer for every tax question. Before deciding to sell your home, you should meet with a knowledgeable tax professional, such as a CPA or an attorney with an LL.M. in taxation, to discuss the options that may be right for you.

© 2016 DeLeon Realty

- DeLeon Insight July 2016 13

- D E L E O N R E A L T Y-

SUMMER SPLASH J U LY 1 1 - J U LY 2 4 DeLeon Realty knows how important it is to maintain your new home investment.

So, if you buy one of our Summer Splash listings between July 11th and July 24th, you will receive a terrific complimentary package with three years of maintenance for your new home. This will include annual checkups that will save you both time and money while covering essential tasks like: - Cleaning gutters, downspouts, exhaust vents, and filters - Checking toilet operations and smoke and carbon monoxide detectors - Removing tree branches

- Maintaining water heater

- Pressure washing of parking area

- Replacing HVAC filter

- Lubricating garage door system

…and much more! For more details on this exclusive offer, visit www.deleonrealty.com/summersplash

650.488.7325 | www.deleonrealty.com/summersplash | DeLeon Realty CalBRE #01903224

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Summer Splash Listings 15 3 S . Clar k Av enue, Los A l to s Of f e red at $ 3 , 8 98,000

Custom Home with Dynamic Lower Level Incredible amenities give distinct flair to this one-ofa-kind 5 bedroom, 4.5 bathroom home of 4,936 sq. ft. (per county) that occupies a property of 10,160 sq. ft. (per county). Offering functional, highly detailed spaces and an open layout, the home provides three fireplaces, private outdoor areas, and a versatile walkout lower level with a sauna, a wine cellar, and a showstopping entertainment lounge. From this central location, you will be mere moments to charming downtown Los Altos, beautiful parks, and soughtafter LASD schools.

For video tour & more photos, please visit: www.153SouthClark.com

3475-3485 Middlefield Road, Palo Alto Of f e red at $ 4 , 4 98,000

New Luxury Compound with Ultimate Flexibility Built in 2016, this dazzling compound combines a 6 bedroom, 4.5 bathroom main home, a 2 bedroom, 1 bath guesthouse, and a 1 bathroom studio with total above-ground square footage of 5,027 sq. ft. (per plans). A paver driveway extends throughout this property of 13,891 sq. ft. (per city), while highend finishes and modern luxuries adorn the expertly crafted interiors. This central yet peaceful location is within strolling distance of Mitchell Park, Community Center, and Library, and acclaimed Palo Alto schools.

For video tour & more photos, please visit: www.3485Middlefield.com

Š 2016 DeLeon Realty

- DeLeon Insight July 2016 15 

Summer Splash Listings

1 2 38 0 G igli C ourt, Los A l to s H i l l s O f f e re d at $ 5 , 9 88,000

Luxurious Gated Oasis Lush, tropical landscaping accents this spellbinding 5 bedroom, 4.5 bathroom home of 5,530 sq. ft. (per county) that offers gated grounds of 1.11 acres (per county). The alluring interior displays vaulted ceilings, luxurious updates, and gorgeous spaces that include a gourmet kitchen, a regal master suite, and an office. Boasting peace and privacy, the residence also provides five fireplaces, a three-car garage, and a versatile poolhouse. You will have prime access to Highway 280, Fremont Hills Country Club, and terrific PAUSD schools.

For video tour & more photos, please visit: www.12380Gigli.com

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Summer Splash Listings 73 6 Oak v iew Wa y, Eme ra l d H i l l s Of f e re d at $ 1 , 7 88,000

Hillside Elegance and Fine Views Offering a peaceful setting surrounded by stately redwoods, this 4 bedroom, 3.5 bathroom home of 3,080 sq. ft. (per county) occupies a property of 7,875 sq. ft. (per county) and includes a variety of fine updates. Enjoy elegant, effortless entertaining with amenities like a wet bar, a wine cellar, spacious gathering areas, and low-maintenance outdoor retreats.

Complete with an attached three-car garage, the home also offers beautiful bay views, and is a short drive to local dining, popular parks, and terrific schools.

For video tour & more photos, please visit: www.736Oakview.com

2819 Ramona Street, Palo Alto Of f e re d at $ 4 , 4 88,000

New Midtown Residence with Lower Level Well-planned and expertly executed, this brand-new 5 bedroom, 6.5 bath luxury residence of approx.

5,075 sq. ft. (per project summary), including garage, occupies a centrally located property of 8,070 sq. ft. (per city). High-end finishes grace this dramatic design, which is fully wired for everyday convenience and unforgettable entertaining. Outstanding features include two fireplaces, all en-suite bedrooms, and a magnificent walk-out lower level with a home theater.

Stroll to popular parks and El Carmelo Elementary (API 944) while enjoying close proximity to California Avenue (buyer to verify eligibility).

For video tour & more photos, please visit: www.2819Ramona.com

Š 2016 DeLeon Realty

- DeLeon Insight July 2016 17 

Summer Splash Listings

2 6 87 5 Elen a R oad , Los A l to s H i l l s O f f e re d at $ 6 , 9 88,000

Privacy, Elegance, and Spectacular Views A gated, tree-lined avenue leads to newly renovated hilltop grounds of 1.62 acres (per county), which include a 6 bedroom home of over 6,300 sq. ft. (per county) with 5 full and 2 half bathrooms and an additional poolhouse with 1 bathroom.

Within this elegant estate, you can enjoy astounding bay views, immense privacy, luxurious yet versatile spaces, and a prime location within moments of Fremont Hills Country Club and with access to Palo Alto schools (buyer to verify eligibility).

For video tour & more photos, please visit: www.26875Elena.com

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Summer Splash Listings 47 3 F er n e Av en ue, Pa l o A l to Of f e re d at $ 1 , 9 88,000

Bright, Peaceful Living in South Palo Alto Fine updates and an incredible backyard make this 4 bedroom, 2 bathroom home of 1,765 sq. ft. (per county) highly desirable. Standing on a spacious property of 8,030 sq. ft. (per county), this residence displays floor-length windows throughout its gathering areas, encouraging indoor/outdoor living and entertaining.

Other features include stone-lined bathrooms and an attached two-car garage. This tree-lined property also offers fruit trees and a large wraparound terrace.

Stroll to Cubberley Community Center, Caltrain, and Charleston Shopping Center, and enjoy easy access to distinguished PAUSD schools.

For video tour & more photos, please visit: www.473Ferne.com

3623 Glenwood Avenue, Redwood City Of f e re d at $ 1 , 2 98,000

Home with Captivating Backyard Haven Inviting outdoor spaces distinguish this fine 4 bedroom, 3.5 bathroom home of 1,961 sq. ft. (per appraisal) that stands on a property of 6,386 sq. ft. (per appraisal). Skylights, crown molding, and updated appliances enhance the interior, while the outdoors are prime for entertaining and include several fruit trees, multiple tiered decks, and a hot tub with sweeping views. The residence is ideally located within steps of Garrett Park and an easy stroll to local shopping and dining, and fine schools are easily accessible.

For video tour & more photos, please visit: www.3623Glenwood.com

Š 2016 DeLeon Realty

- DeLeon Insight July 2016 19 

Summer Splash Listings

2 5 61 7 W. Fr emont Roa d , Los A l to s H il l s O f f e re d at $ 7 , 4 88,000

Custom Chateau by Downtown Los Altos Crafted from features imported from Europe, this elegant residence includes 5 bedrooms, 6 full and 3 half bathrooms, and over 7,500 sq. ft. (per appraisal) on spacious, flat grounds of 1.57 acres (per county). Promising a lifestyle of quiet luxury, this custom home skillfully blends the grandeur of a French country estate with 21st-century comforts. This peaceful, gated mansion includes garage parking for four cars, potential au pair quarters, a poolhouse, and pristine creekside grounds. Charming downtown Los Altos is within strolling distance.

For video tour & more photos, please visit: www.25617WestFremont.com

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Summer Splash Listings 34 54 G r eer R oad, Pa l o A l to Of f e re d at $ 1 , 9 98,000

Residence Boasts Modern Updates Energy-efficient features abound inside this updated 3 bedroom, 2 bathroom home of 1,437 sq. ft. (per county) that occupies a lot of 6,000 sq. ft. (per city).

This sky-lit, solar-equipped design features radiant floor heating, a fireplace, and spaces filled with natural light, including a chef ’s kitchen. Private outdoor retreats include a walled garden, drip irrigation, and droughttolerant landscaping. The residence also provides a broad paver driveway and an attached two-car garage.

Stroll to fine parks and Palo Verde Elementary (API 961) (buyer to verify eligibility).

For video tour & more photos, please visit: www.3454GreerRoad.com

3797 Louis Road, Palo Alto Of f e re d at $ 1 , 9 98,000

Airy Interior and Outdoor Privacy Clerestory windows, hardwood floors, and high beamed ceilings create a fine, breezy interior within this 3 bedroom, 2 bathroom home of 1,911 sq. ft. (per county) that stands on a lot of 7,828 sq. ft. (per city).

Featuring bay windows and upgraded roofing, the home also includes a fireplace, large gathering areas, a sun-lit kitchen, and an immense master bedroom.

Several rooms access the outdoors, where you will enjoy fruit trees and private decks. Stroll to parks, community centers, Charleston Shopping Center, and outstanding PAUSD schools.

For video tour & more photos, please visit: www.3797Louis.com

© 2016 DeLeon Realty

- DeLeon Insight July 2016 21

Summer Splash Listings

L o s Alt os Hills Esta te P ri c e Upon R eque st

Dreamy Custom-Built Tuscan Estate Custom-built on a stunning property of 4.4 acres (per county) overlooking the bay, this 6 bedroom estate of approx. 9,000 sq. ft. (per MLS) includes 5 full and 3 half bathrooms, plus a cabana with 1 full bath. Blending Italianate beauty with modern luxuries, this welcoming home offers outstanding living spaces. The immaculately landscaped grounds provide a designer play fort, an infinity pool, and a scenic hilltop awaiting further development. Palo Alto Hills Country Club and top Palo Alto schools are easily accessible (buyer to verify eligibility).

For video tour & more photos, please visit: www.ExclusiveTuscanEstate.com

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Summer Splash Listings 3 39 6 Par k B ou leva rd , Pa l o A l to O f f e re d at $ 1 , 9 88,000

Craftsman Luxury, Modern Leisure Exuding Craftsman charm, this luxury 3 bedroom, 2.5 bathroom residence of 2,053 sq. ft. (per county) is lined with inviting, leafy outdoor spaces on a lot of 5,012 sq. ft. (per city). Layered crown molding and rich hardwood floors embellish the interior, which offers a fireplace, granite and marble finishes, and fine spaces like formal living and dining rooms and a delightful master suite. Boulware Park is steps away, and you can also stroll to vibrant California Avenue while easily accessing terrific Palo Alto schools.

For video tour & more photos, please visit: www.3396Park.com

3849 Page Mill Road, Los Altos Hills O f f e re d at $ 2 , 9 88,000

Ultimate Privacy with Stunning Bay Views Blending luxury, tranquility, and natural beauty, this well-crafted 4 bedroom, 4.5 bathroom home of 5,008 sq. ft. (per plans) rests on 10 acres (per county), forming the perfect escape from Silicon Valley’s bustle.

This dreamy custom residence spreads across three levels and offers a different view from every window, in addition to a highly functional floorplan, a three-car garage, a library, and an array of high-tech amenities.

Fall in love with the sights and sounds of this rustic setting, and enjoy easy access to local trails.

For video tour & more photos, please visit: www.3849PageMill.com

© 2016 DeLeon Realty

- DeLeon Insight July 2016 23

Summer Splash Listings

2 8 5 Wooded Vie w D ri ve , Los Gato s O f f e re d at $ 7 , 4 88,000

Palatial Home Offers Fascinating Views An immense gated driveway escorts you to this tech-savvy 6 bedroom, 7.5 bathroom estate of 8,249 sq. ft. (per appraisal) that occupies 6.25 acres (per county). Offering unobstructed bay views and extreme privacy, this masterpiece is outfitted with 120 slabs of limestone and touts a light-filled interior with four fireplaces and fully functional spaces. The dreamy grounds include a three-car garage, an outdoor kitchen, and mature vineyards. You will be mere minutes to downtown Los Gatos, recreational attractions, and fine Los Gatos schools (buyer to verify eligibility).

For video tour & more photos, please visit: www.285WoodedView.com

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Summer Splash Listings 83 1 C h imalu s Dri ve , Pa l o A l to Of f e re d at $ 2 , 9 88,000

New Modern Farmhouse in Barron Park

For video tour & more photos, please visit: www.831Chimalus.com

Tucked within attractive Barron Park, this exciting new construction combines a fantastic location, farmhouse character, and modern luxuries. Fine amenities include Caesarstone countertops, Carrara marble finishes, and engineered hardwood floors, while French doors open to bluestone porches overlooking the new landscaping. Sunny, flexible living and dining areas share an open layout with the gourmet island kitchen.

Within strolling distance of Bol Park and Bike Path, this residence is also an easy stroll to Barron Park Elementary (buyer to verify eligibility).

1052 Doheny Terrace, Sunnyvale Of f e re d at $ 9 8 8 ,000

Cutting-Edge Townhome Living Filled with exciting features, this high-tech residence showcases a home automation system to allow remote access via your smartphone. Tucked within a well-manicured community, the home displays premium construction, energy-efficient amenities, and stylish updates like new carpet, new colors, and new countertops. Complete with a two-car garage, this handsome townhome is within mere moments of Central and Lawrence Expressways and Highways 237 and 101, and also easily accesses vibrant Mercado Center and other fine local amenities.

For video tour & more photos, please visit: www.1052Doheny.com

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- DeLeon Insight July 2016 25 

Summer Splash Listings

1 7 37 Un iv er sit y A venue, Pa l o A l to O f f e re d at $ 7 , 4 98,000

Breathtaking New Home in Crescent Park Completed in 2016 and basking in natural light, this high-tech 5 bedroom, 4.5 bath residence of over 4,500 sq. ft. (per plans), including garage, enjoys a spacious gated property of 15,000 sq. ft. (per city) in one of Palo Alto’s most illustrious neighborhoods. Offering natural finishes and state-of-the-art details, its dynamic spaces include two master suites and a cuttingedge kitchen. The fluid design is anchored by an immense courtyard, perfect for outdoor entertaining, and the grounds are newly landscaped. Eleanor Pardee Park and popular downtown attractions are within moments.

For video tour & more photos, please visit: www.1737University.com

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Summer Splash Listings 9 I n n er C ir cle, Re d wo od Ci ty Of f e re d at $ 1 , 4 88,000

Stylish with Dreamy Backyard Extensively remodeled in 2016, this superb 3 bedroom, 2 bathroom home of approx. 1,740 sq. ft. (per plans) on a spacious property of 7,014 sq. ft. (per county) is ideally located along a peaceful cul-de-sac. Offering an open, light-filled floorplan, LED lighting, engineered hardwood floors, and many more fine amenities, this residence affords modern living with a luxurious twist.

The home includes an attached two-car garage and a magical backyard shaded by mature trees. Live within moments of parks, Caltrain, and downtown Redwood City, and stroll to fine schools.

For video tour & more photos, please visit: www.9InnerCircle.com

615 Lakeview Way, Emerald Hills Of f e re d at $ 1 , 3 98,000

Peaceful Cabin-Like Retreat Resting within a community known for its serenity and natural beauty, this 3 bedroom, 2.5 bathroom home of 1,640 sq. ft. (per county) provides a rustic yet elegant ambience and a lot of 5,969 sq. ft. (per county). The open design includes a stone fireplace, skylights, and hardwood floors, while inviting decks with a hot tub are showcased outdoors. Other features include central cooling, an attached two-car garage, a flexible office, and a must-see master suite. Enjoy easy access to recreational areas, local conveniences, and fine schools.

For video tour & more photos, please visit: www.615Lakeview.com

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- DeLeon Insight July 2016 27 

Summer Splash Listings

2 0 2 Camin o Al Lag o, A the rto n O f f e re d at $ 1 6 ,850,000

Showstopper Estate in Prime Atherton Located in the prized Circus Club area, this state-of-the-art gated estate holds a main home with 5 bedrooms, 5 full and 2 half baths, and a 1 bedroom, 2 bathroom guesthouse, boasting a collective living area of 10,973 sq. ft. (per plans). Rebuilt in 2013, the home is bursting with high-tech amenities and offers stately yet inviting entertaining spaces. Imported fixtures enhance the luxurious ambience, while the private grounds of 1.24 acres (per county) showcase exciting outdoor living areas.

Prestigious schools are within strolling distance.

For video tour & more photos, please visit: www.202CaminoAlLago.com

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Summer Splash Listings

1 52 5 Edgew ood D ri ve, Pa l o A l to O f f e red at $ 5 , 4 98,000

Exciting Property in Crescent Park Addition Showcasing an impressive lot of 20,140 sq. ft. (per county), this property includes a tastefully updated 4 bedroom, 3.5 bathroom home of 3,305 sq. ft. (per county) outside the flood zone and potential MFA of approx. 5,500 sq. ft., perfect for expansion. The spacious, versatile design encourages indoor/outdoor entertaining, and provides a stylishly remodeled kitchen, two fireplaces, and all en-suite bedrooms. Centered by a heated pool, the park-like grounds include many fruit trees and are minutes from fine parks, excellent Palo Alto schools, and University Avenue.

For video tour & more photos, please visit: www.1525Edgewood.com

Š 2016 DeLeon Realty

- DeLeon Insight July 2016 29 

Summer Splash Listings

2 6 99 1 Taaf f e R oad , Los A l to s H i l l s O f f e re d at $ 7 , 9 98,000

New Executive Villa Enjoys Bay Views Built in 2015, the extraordinary residence offers 6 bedrooms, 7 full and 2 half baths, and over 7,500 sq. ft. (per project summary). This entertainment-friendly design enjoys lavish features like an elevator, a home theater, a wine cellar with a tasting room, and a gym with a sauna. Faced by a gated motor court, the grounds of approx. 1.2 acres (per county) provide seamless indoor/outdoor transitions and stunning bay views. This luxury masterpiece easily accesses local trails and desirable LASD schools (buyer to verify eligibility).

For video tour & more photos, please visit: www.26991TaaffeRoad.com

30  DeLeon Insight July 2016 - Š 2016 DeLeon Realty

Summer Splash Listings

2 78 11 Saddle C o urt, Lo s A l to s H i l l s O f f e red at $ 6 , 9 88,000

Hilltop Solitude with Panoramic Views Well-appointed indoor and outdoor spaces take full advantage of the astonishing vistas displayed throughout this 5 bedroom, 6.5 bathroom home of 6,598 sq. ft. (per county), which includes grounds of 1.94 acres (per county). The multi-level design is equipped for grand-scale entertaining and boasts five fireplaces, two kitchens, an indoor pool, and a garage that can hold five cars. Within moments of Highway 280, this captivating home balances privacy and natural beauty with prime convenience to urban amenities, including excellent Palo Alto schools (buyer to verify eligibility).

For video tour & more photos, please visit: www.27811Saddle.com

Š 2016 DeLeon Realty

- DeLeon Insight July 2016 31 

DeLeon Market Conditions Atherton Snapshot Atherton Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Atherton Inventory # of New Listings

Price/SqFt Ratio

Cupertino Snapshot Cupertino Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Cupertino Inventory # of New Listings

Price/SqFt Ratio

Hillsborough Snapshot Hillsborough Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Price/SqFt Ratio

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Hillsborough Inventory # of New Listings

DeLeon Market Conditions Los Altos Snapshot Los Altos Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Los Altos Inventory # of New Listings

Price/SqFt Ratio

Los Altos Hills Snapshot Los Altos Hills Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Los Altos Hills Inventory # of New Listings

Price/SqFt Ratio

Menlo Park Snapshot Menlo Park Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Menlo Park Inventory # of New Listings

Price/SqFt Ratio

© 2016 DeLeon Realty

- DeLeon Insight July 2016 33

DeLeon Market Conditions Mountain View Snapshot Mountain View Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Mountain View Inventory # of New Listings

Price/SqFt Ratio

Palo Alto Snapshot Palo Alto Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Palo Alto Inventory # of New Listings

Price/SqFt Ratio

Portola Valley Snapshot Portola Valley Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Price/SqFt Ratio

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Portola Valley Inventory # of New Listings

DeLeon Market Conditions Sunnyvale Snapshot Sunnyvale Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Sunnyvale Inventory # of New Listings

Price/SqFt Ratio

Redwood City Snapshot Redwood City Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Redwood City Inventory # of New Listings

Price/SqFt Ratio

Woodside Snapshot Woodside Median Sales Price & Price/Sq. Ft. Ratio

Sale Price, Median

Woodside Inventory # of New Listings

Price/SqFt Ratio

© 2016 DeLeon Realty

- DeLeon Insight July 2016 35

PRSRT STD ECRWSS U. S. Postage Paid Palo Alto, CA Permit No. 1

®

DeLeon Realty 2600 El Camino Real, Suite 110 Palo Alto, CA 94306

LOCAL POSTAL CUSTOMER

How to Prepare & Market Your Home to Achieve the Maximum Sales Price Thursday, August 18, 2016 6:00 - 8:00 p.m.

Please join DeLeon Realty at our August Seminar. Gain insight from Michael Repka, the Managing Broker and General Counsel of DeLeon Realty, into how you can best prepare and market your home to achieve the maximum sales price.

Also, hear the latest market updates from Ken DeLeon, the most successful real estate broker in Silicon Valley.

Venue: Palo Alto Hills Golf & Country Club, Grand Ballroom 3000 Alexis Drive, Palo Alto

To RSVP, please contact Kimberly Vigil at 650.543.8500 or by email: RSVP@deleonrealty.com ®

650.488.7325 | www.deleonrealty.com | CalBRE #01903224

36 DeLeon Insight July 2016 - © 2016 DeLeon Realty