Make That 23 Percent of Original Pricing for Silicon Valley EstateJune 23, 2017
As we first reported earlier this week, the 47.5-acre de Guigne estate at 891 Crystal Springs Road in Hillsborough, which hit the market priced at $100 million back in 2013, has finally sold.
And based on public-facing MLS records, it would appear the sale price was $29.85 million, which was the list price at the time of the sale.
But according to a plugged-in reader, a review of the transfer tax paid suggests the final contract price for the estate, which includes a classic 16,000-square-foot mansion and enough land to theoretically add up to 10 new homes, was actually $23.364 million or roughly 77 percent below the price at which it was being marketed circa 2013.
Comments from Plugged-In Readers
I must be missing something. Nowhere on the Silicon Valley MLS does it say the house sold for list. It says Sales Price Withheld, and the home changed from Pending (P) to Sold, Sales Price Withheld, which is S (W). Perhaps this is translating differently on associate MLS feeds, but on the one that matters it doesn’t say anything of the sort. So either the listing agent’s clients or the selling agent’s clients didn’t want the final price revealed and paid the fee, but nobody is lying.
The transfer tax is more or less infallible, so I’m sure you’re right with regard to the final price. But the MLS does not say it sold for list anywhere.
We’re not accusing anyone of lying or purposeful deceit. We got snookered by the “Sales Price Withheld,” which doesn’t, in fact, perfectly translate to associate feeds or third party sources which rely on said feeds for their reports and alerts. And now, we’re simply setting the record straight (and then some).
Transfer tax is generally reliable but isn’t infallible. There are ways to game that.
How can someone game that?
One way is for a cash-rich buyer to pay the agents directly, rather than rolling it inside the mortgage or sales price (and therefore through the final sales price and taxable amounts). Depending on the commissions involved, this could remove up to 6% from the sales price.
Personally, I would not consider paying commissions out of pocket as a way to’game’ the system. If you were a savvy (or well advised) cash buyer that would be standard operating procedure. In the case above, the disparity was approx. $4M. I would be surprised if the total commission exceeded 4%. I wasn’t sure if there was some other way to accomplish such?
The biggest surprise to me is that Hillsborough is now considered “Silicon Valley.” When did that happen?
Rager pointed out one method whereby the recorded transfer tax might not be a true reflection of the purchase price. There are others as well, some more insidious that the one noted. I don’t think that anyone was implying that the transfer tax from the De Guigne property transaction does not accurately portray the sale price but rather that the transfer tax in and of itself is not absolute proof of the sale price. As noted by SocketSite, the MLS did not reveal the sale price.
Lets see what the assessor assigns as property value. The form the buyer is required to fill out can contain info not in the public record….it’ll take a while before that info is available.
As we reported above, the assessed value and recorded purchase price was, in fact, $23.364 million (not $29.85 million).
While we didn’t reveal it at the time, the buyer was Elon Musk.
And yes, the property is now back on the market with a $35 million target price but yet to be formally listed or counted as official inventory.
UPDATE: Musk’s Massive Silicon Valley Estate Sold for $30 Million
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