DeLeon Realty November 2015 Newsletter

The DeLeon Insight Silicon Valley Real Estate Newsletter Local Specialization

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Global Reach

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Integrated Approach Novembe r 2015

How the Real Estate Industry Works

• Appreciation Potential in Redwood City

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• Resolving Real Estate Disputes 2015 Mills DeLeonAct Realty - DeLeon Insight November 2015 1 • Real Property Tax Breaks Under©the www.deleonrealty.com

The DeLeon Update: Market Trends

Neighborhood Spotlight – Appreciation Potential in Redwood City Average Sales Price 2014 & 2015 $8,000,000 $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000

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Sale Price, Average (1/2014 - 9/30/2014)

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Sale Price, Average (1/2015 - 9/30/2015)

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By: Ken DeLeon, Esq. DeLeon Founder

Average sales price for single-family homes from 1/1/2015 to 9/30/2015 compared to a similar period in 2014.

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Average Price/Square Foot 2014 & 2015

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he reputation of Redwood City is rising as rapidly as the many cranes dotting the downtown skyline. Once viewed as on the periphery of Silicon Valley, Redwood City’s vibrant downtown and thriving start-up scene is making this formerly sleepy town one of the Valley’s hot spots, both for economic growth and social enjoyment.

While Redwood City is the Peninsula’s oldest town thanks to its incorporation in 1867, it has in many ways become one of the youngest and most vibrant downtowns due to all of the new construction that has occurred, along with approved plans for additional development. With the city approving a master plan in 2012 for redevelopment of the downtown, developers have since applied for over 500,000 square feet of commercial space development and 1,400 residential units just in the downtown area alone, making this one of the best downtowns to actively balance both living

and working.

The attractiveness of Redwood City and its thriving downtown has drawn start-ups as well as established companies. With office space in Palo Alto, Mountain View, and Menlo Park being both expensive and rare, the central location of Redwood City and its Caltrain stop make this city the new go-to area for leasing commercial property.

Examples abound, including Box, Inc., which is leasing 334,000 square feet and moving its headquarters from Palo Alto to a new downtown building. Stanford has a long-term development plan for its 35acre site that will result in constructing 1.5 million square feet of new administrative offices, freeing the main campus for the university’s academic needs. Google recently purchased nearly a million square feet of commercial space in Redwood City’s Pacific Shores office park as office space near its Mountain View campus has already been purchased.

Similar to Mountain View a decade

ago, this explosive growth in commercial space and a resulting boost in tax revenue for schools will lead to an increase in API scores and a resultant rise in residential real estate prices. The increase in home prices has accelerated and will continue to appreciate in value as the secret of Redwood City’s revitalization gets out. To illustrate, just in 2015 alone, the median home price has leaped to well over a million dollars, jumping 21.8 percent to $1,125,000. Yet even with this surge, we project continued appreciation as much of this redevelopment is still just beginning, and more prestige and more property tax dollars will be coming to Redwood City. A lot of my clients, as do I, now view Redwood City as a strong and stable market for investment.

Once the economic center of San Mateo County, Redwood City has reinvented itself, and its burgeoning skyline and home prices are rising as rapidly as only a young redwood tree can.

01/2015 - 9/30/2015

Average price per square foot for single-family homes from 1/1/2015 to 9/30/2015 compared to a similar period in 2014. *Data gathered from the Multiple Listing Service on 10/6/2015

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- DeLeon Insight November 2015 3

Resolving Real Estate Disputes By: Michael Repka, Esq. DeLeon CEO/General Counsel

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ost real estate transactions close without a hitch. Agents on both sides explain the rights and responsibilities to their clients, and everyone does as required and expected. By and large, agents are competent and thorough, and buyers and sellers are reasonable. But, not always.

When a dispute arises, most parties fall into one of two camps. There are those who are too eager to sue, and those who are too scared of litigation. This often leads to unfair results. In an effort to avoid lawyers, some parties give in and give up their rights or claims even though they are entirely correct in their positions and could receive restitution with little effort. On the other hand, some parties casually threaten litigation as if it were a mere inconvenience rather than an onerous process.

Fundamentally, when a dispute arises, the parties need to understand their rights and the various options to help resolve these issues. Armed with this information, parties are often able to reach an agreement that is fair to all and quite efficient.

Standard Form Contracts In Silicon Valley, most residential real

estate agents use a standard form contract from either the California Association of Realtors® (CAR) or the Peninsula Regional Data Service (PRDS). Given the prevalence of the PRDS contract in Palo Alto and surrounding cities, this article will focus on its provisions.

Most of the rights and responsibilities of the parties to a residential real estate agreement are laid out in the PRDS Real Estate Purchase Contract. Unfortunately, many clients do not read it closely enough, and their agents do not explain its provisions. A considerable amount of time, money, and aggravation could be avoided if the parties thoroughly understood what they were signing before submitting or accepting an offer. A good agent or manager should be willing and able to explain all of the provisions of the contract that you are being asked to sign. In fact, California case law specifically holds that agents are expected to do just that. (See Miller & Starr, California Real Estate Digest, “Agency and Broker Liability” § 3:37. (2 Cal. Real Est. § 3:37 (3d ed.)). If not, clients should ask to speak with a licensed attorney who handles residential real estate matters before signing either an offer or a listing agreement so that the attorney can explain all of the provisions.

It should be noted that the CAR and

PRDS contracts and related documents provide significant protection to real estate brokers and salespeople, in addition to defining the rights and responsibilities of the parties. As discussed in “Structuring Listing Agreements” (The DeLeon Insight, September 2015), prudent sellers can request an addendum to the listing agreement that itemizes all of the responsibilities of the listing agent.

When a dispute cannot be resolved through reasonable discussion, there are four main options available: mediation, arbitration, litigation, and small claims court.

Mediation Mediation is a non-binding process in which the parties, with or without attorneys, meet with an independent third party to come to a common agreement. In practice, this can be a very useful step because it helps the parties understand their rights and obligations and the cost associated with continuing the dispute.

Under the PRDS contract, mediation is required irrespective of whether the parties agree to the arbitration clause (discussed below), and no party can collect attorney’s fees from the other side if they refuse to mediate. It should be noted that real estate agents are not required to participate in

mediation under the terms of either the CAR or PRDS contract, although they can agree to do so. All clients should consider requesting a written commitment from their agent’s managing broker stating that they will participate in any and all mediation at the request of their clients. This written commitment should be obtained at the beginning of the relationship.

Arbitration Arbitration is somewhat like mediation, but with teeth. In arbitration, the buyer and the seller arrange for the services of a private arbitrator to settle the case. Instead of a trial, arbitration provides an informal hearing with the arbitrator, the buyer, the seller, and usually the buyer’s and seller’s attorneys.

Documents may be submitted and witnesses may testify. Following a hearing, the arbitrator renders a decision, which is usually binding—even if wrong. In other words, the loser generally cannot appeal.

While arbitration is often thought to be faster and less expensive than litigation, it is still a costly undertaking and almost always involves attorneys. Additionally, under standard form contracts, real estate licensees are not required to arbitrate. As a result, the buyer or seller may have to initiate a separate action in court to seek damages from a real estate agent or broker. However, had the parties not initialed the arbitration clause, they would have been able to sue both the agent and the other party in the same action in the court of law. Similar to mediation, when engaging an agent, all clients should consider requesting a written commitment from their agent’s managing broker stating that they will participate in any and all arbitration proceedings at the request of their clients. If the agent and the managing broker of the real estate office are unwilling to make this commitment, then the client may want to consider finding a different real estate agent with whom to work. It is important to get this commitment in writing and signed by both the agent and the managing broker.

Litigation Think Perry Mason, but without the

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drama. Litigation is simply suing someone in court. This process is expensive and timeconsuming, but the court’s rulings may be appealable to a higher court.

Although many clients with legal training actually prefer litigation over arbitration because “bad” decisions can be appealed, careful consideration should be given to the potential impact of not initialing the arbitration clause.

Many sellers (or their agents) prefer arbitration because of the presumption that it is quicker and less expensive than litigation so an offer that does not include arbitration may be a competitive disadvantage.

Small Claims Court Irrespective of whether the parties initialed the arbitration clause, small claims court is a fourth option available to settle disputes of $10,000 or less. The process is fairly simple, and all parties represent themselves. The elimination of attorneys on both sides makes this a valuable, albeit underutilized, option for many of the

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smaller issues that might arise after a sale.

Although vigilance and good professional guidance should be able to keep most buyers and sellers out of disputes, a thorough understanding of the contract terms and the dispute resolution options will provide guidance should the unexpected arise.

When one of our clients encounters a problem on a transaction, I will advise the client on the pros and cons of each potential path to resolving the dispute and suggest the best option. As an experienced real estate attorney, I can explain complex legal situations and alternatives in a way that puts our clients at ease. If I am not able to help due to a conflict of interest, DeLeon Realty will pay for a comprehensive consultation (up to five hours) with another qualified residential real estate attorney.

While DeLeon Realty prides itself on providing our clients with great results, it is when a problem arises that we really shine the brightest.

- DeLeon Insight November 2015 5

Lawyers’ Heightened Standards of Care and Ethics in Real Estate By: Michael Repka, Esq. DeLeon CEO/General Counsel

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D eL e o n Re alty Thanks the People Who Make Our Communities Great DeLeon Realty thanks the many people who contribute to our children’s future and our communities’ safety. As a gesture of gratitude, DeLeon Realty will waive the buyer’s side of the commission when we represent any teacher, firefighter, or police officer currently employed in Atherton, Los Altos, Los Altos Hills, Menlo Park, Palo Alto, Portola Valley, or Woodside who purchases a primary residence within the community in which they work.

Silicon Valley is a wonderful and special place to live and work. We want to help make it possible for those who work in our communities to also be able to live here!

650.488.7325 | info@deleonrealty.com | www.deleonrealty.com | CalBRE #01903224

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isk management has always been a key responsibility of real estate managers and the attorneys who advise them. For that reason, many real estate offices have implemented policies that prohibit real estate agents with other professional accreditations from advertising their credentials. For example, some real estate brokerages say that licensed attorneys may not include “J.D.” or “Esq.” on their business cards because doing so may subject them to a higher standard of care. As one might imagine, many real estate brokerages want to be held to the lowest possible standard because it means the lowest potential for liability.

While the idea of applying a varying standard to different people in the same industry may seem unfair, it actually makes perfect sense. After all, clients who are asking for contract interpretation, dealstructuring advice, or the likely outcome of a dispute should expect a more reliable answer from someone who they know is an attorney. On the other hand, if the clients faced the same type of problem and they were represented by a real estate agent who lacked that type of professional background, the clients would be more likely to go out and engage outside counsel to provide the same advice.

Along the same lines, attorneys may be held to a higher ethical standard than real estate agents who are not members of the State Bar of California. The Standing Committee on Professional Responsibility and Conduct issued Formal Opinion No. 1995-141, which provides “when rendering professional services that involve a fiduciary relationship, a member of the State Bar must conform to the professional standards of a lawyer even if the services performed could also be rendered by one licensed in a different profession” (Sodikoff v. State Bar, (1975), 14 Cal.3d 422, 429; Libarian v. State Bar (1945) 21 Cal.2d 862, 865; Jacobs v. State Bar (1993) 219 Cal. 59).

Based on the above-cited ethics opinion and cases, it is clear that a stricter code of ethics, generally applied to attorneys, will

apply to the transaction. That is one of the reasons I believe that the restrictions on attorney solicitation most likely prohibit a Realtor®/attorney from many of the types of direct in-person “prospecting” tactics that are conducted by many brokerages and agents, such as “door-knocking” or phone solicitation of an expired listing.

At DeLeon Realty we have made the conscious decision to openly advertise our professional credentials. We are well aware that having licensed contractors, accredited interior designers, and licensed attorneys will cause clients to expect more from us; however, we expect more from ourselves. We believe that clients should expect accurate professional advice when involved in a real estate transaction. When we answer tax, legal, construction, or land-use questions, we know that our clients will be relying upon that advice, and we are fully prepared to stand behind our answers.

This is certainly not to say that this © 2015 DeLeon Realty

approach is the right decision for everyone.

Many brokerages have a much higher ratio of independent contractor agents to office staff and management, and they are less able to supervise the advice given by the individual agents. From an office’s point of view, it is certainly far more conservative and safe to instruct all agents not to include professional accreditations such as “J.D.” or “Esq.” on their business cards.

Risk management is an important part of the management of a real estate brokerage; however, DeLeon Realty believes the best way to manage risk is by providing our clients with the best possible advice. When a client is well advised at every step of the transaction, they are less likely to make a costly mistake. Fundamentally, we believe that our clients deserve the highest level of advice, analysis, and insight and we will continue to provide that advice irrespective of the increased liability to us.

- DeLeon Insight November 2015 7

Real Property Tax Breaks Under the Mills Act

Chinese Stock Market Woes and the RMB Devaluation’s Impact on Silicon Valley Real Estate

By: Michael Repka, Esq. DeLeon CEO/General Counsel

By: Michael Repka, Esq. & Kim Heng, M.B.A. DeLeon CEO/General Counsel & Director of International Operations

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he recent turmoil in the Asian stock markets, most notably in China, and the devaluation of the Chinese currency have evoked many questions about the likelihood of continued investment in Bay Area real estate by Chinese buyers.

Coincidentally, we were attending meetings with some high-level government officials in Beijing during the height of the Asian stock market freefall in July. Upon our return, we started to receive a string of inquiries from the press and clients alike. Those same questions persist three months later.

The Source of the Concern The Shanghai Stock Exchange Composite Index was at 2,083 on January 3, 2014, and it soared to 5,166 by June 12, 2015.

However, since that date, it retreated to 3,155 by October 7, 2015. This was still a net increase of over 50 percent in less than two years, but it was certainly a huge drop from its heights.

In addition to the stock market turmoil, there has been a good bit of currency instability in China. In October 2005, one US dollar could be exchanged for 8.1 Chinese yuan renminbi (RMB). By July of 2008, that ratio was reduced to one US dollar equaling 6.8 RMB which, much to the chagrin of trading partners (including the United States), remained pretty consistent until June 2010. From June 2010 until December 2013, the rate fell to one US dollar equaling 6.06 RMB, which gave Chinese buyers a lot of power to purchase US real estate.

However, on August 11, 2015, China’s central bank announced that they would devalue their currency and, by August 26, the rate had changed to one US dollar equaling 6.42 RMB. While the reduced

buying power could discourage some Chinese buyers from purchasing real property in the United States, fears that the devaluation trend could continue or accelerate may actually encourage some buyers to act more expeditiously.

That brings us to today. We have a Chinese stock market that is down significantly and a weakening Chinese currency, leaving the open question of whether Chinese buyers will continue to buy Silicon Valley real estate as aggressively as they have over the past three years.

Although it may be unwise to look to a local real estate agent for prognostication of global economic trends, our position as the top real estate team in the United States and the most aggressive marketers to the Chinese community in Silicon Valley gives us a significant amount of real-time data on what is actually happening in the marketplace. What we are seeing is a stratified market that is responding very differently at different price points.

Impact on Local Real Estate We have seen a moderate decrease in interest from Chinese buyers of lowerpriced properties which, in Silicon Valley’s rarefied air, include properties valued at under $2 million. Libin Li, an employee in our Beijing office, said some buyers have

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indicated a desire to wait until their stock holdings rebound before moving money to the US. However, we have also seen an increased demand from the extremely wealthy portion of Chinese buyers. By way of example, we recently sold one of our listings for approximately $7 million to a Chinese billionaire who wanted to diversify his portfolio in light of the economic turmoil in Asia. Similarly, we have experienced an uptick in interest from affluent Chinese buyers on several of our listings in Atherton, and another Chinese billionaire has expressed an interest in a very aggressive buying campaign.

The fundamental factors that have attracted international buyers to Silicon Valley have not changed. We still enjoy a remarkably strong business environment and an educated workforce that is unrivaled.

Additionally, the stability of the United States and its legal system, which includes very predictable property rights, attracts many people from around the world. While it is too soon to conclude whether the interest from Chinese buyers will continue at the same pace as we have seen in recent years, we expect that we will continue to see a “flight to safety” mentality for at least 18 more months.

any homeowners and homebuyers are attracted to historic homes due to their charm, majesty, and/ or history. Some areas, such as Professorville in Palo Alto, are known for their high concentrations of historic homes. Although the buyers and owners of these homes generally realize that they face significant restrictions when it comes to remodeling or rebuilding, many overlook one significant property tax opportunity: the Mills Act. The Mills Act offers a substantial reduction in property taxes for owners of “qualified historical properties,” provided they agree to preserve, restore, rehabilitate, and maintain the historical and architectural character of their properties. The legislative intent was to reduce the property tax so that owners of historic homes could use that savings to maintain the historic character of the house.

In order to qualify, the property must be privately owned and listed on any official federal, state, county, or city register.

However, being listed on a register is not enough. The program is administered at the local government level, and there are limitations to the number of homes that can qualify. There is also a detailed application procedure.

If the property is already designated as a “qualified historical property,” then the procedure is fairly straight forward: 1. The applicant submits a Mills Act application, including a plan for preservation, to the county’s Planning Office.

2. The Historical Heritage Commission evaluates the application.

3. If the Commission recommends approval to the Board of Supervisors, the Office of the County Counsel prepares a preservation contract that incorporates the standards and conditions stipulated by the Commission and agreed upon by the property owner.

4. The recommendation of the Commission and the preservation contract are then presented to the Board for approval.

5. If the Board confirms the findings of the Commission, the preservation contract will be approved and formally executed between the property owner and the county.

6. The Assessor’s Office will then make the appropriate changes to the assessment roll. This could result in a tax savings of over 50 percent per year, although the savings will be much less if the property has been owned for a long time and the owners benefit from Prop. 13.

Once approved, the taxpayer enters into

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a 10-year contract with automatic oneyear extensions. The contract will outline the steps for preservation and restoration and will provide for access and inspection to ensure compliance. Although these restrictions are binding on future owners for the period of the contract, the owner can take steps to terminate the arrangement once the contract period is up.

The state of California offers similar tax breaks for owners of farmland and open space land under the Williamson Act (technically known as the California Land Conservation Act of 1965). We will address the benefits and burdens of the Williamson Act in the next edition of The DeLeon Insight.

- DeLeon Insight November 2015 9

DeLeon Listings 4 Tips for Refurbishing Your Landscaping on a Moderate Budget

By: Nicole Chavez DeLeon Design Coordinator

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uring the summer, we as Californians love taking advantage of our outdoor spaces. However, by spending more time in these spaces that we have forgotten most of the year, we tend to notice the imperfections we ignored all winter. That brown lawn or dead planter box does not have to be a sore spot anymore! With a few easy, low-maintenance suggestions, you can help restore your landscaping to an object of pride and enjoyment.

280 N a thho r s t A venue, Por tol a V a l l ey Offer ed a t $5, 988, 000

Gorgeous Home for Entertaining Seamless transitions between indoor and outdoor living areas define this pristine 5 bedroom, 5 bathroom home of 5,700 sq. ft. (per county), which occupies a lush lot of 1.28 acres (per county). Solar-powered and custom-designed, this residence boasts a home automation system, mahogany doors and woodwork, and multi-zoned radiant heating. Centered by an island kitchen that opens to breezy living and dining areas, the interior provides a wall of folding windows that reveals the wide slate terrace. The lower level exhibits a gym, a media room, and a wine cellar, while fine additional features include a seductive master suite, a three-car garage, and a scullery. In this excellent location outside Windy Hill Open Space Preserve, you will be steps away from Roberts Market and Woodside Priory.

For video tour & more photos, please visit: www.280Nathhorst.com

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Get rid of dead grass!

With the water restrictions in place in most counties, it is hard to maintain your once-lush grass. For those who love the look of green grass, there are alternative, native grasses that can offer the same look and yet require half the maintenance and little to no water. To get the same green look without using a thirsty turf, try using Carex pansa (dune sedge) or Festuca rubra (red fescue).

Both of these grasses can be mowed like regular lawns and will still give you green landscaping even in the driest climates.

Another alternative is synthetic grass.

However, the initial installation cost for a synthetic lawn is often twice the cost of a regular lawn or garden. Since synthetic lawn

is made from rubber or recycled products, it does not add any cooling benefits that grass or plants would. There have even been reports of people receiving burns from certain brands of these artificial turfs. Also, once removed, these turfs are not recyclable and instead get thrown into a landfill. For more environment-friendly options, there are plenty of plant and landscaping design alternatives you can use to fill that space.

Don’t be afraid to add some color!

There are a variety of native California shrubs and flowers that will help add color to your yard while also cutting down on your watering. Once established, native plants not only are low-maintenance and drought-tolerant, but they also will attract native wildlife, such as hummingbirds, butterflies, and exuberant homebuyers.

There are also several sun-loving and shade-friendly plant options you can turn to. A few colorful plant options are lavender, salvia, and even succulents, which provide a variety of options with unique colors and shapes to fit into any garden. Another benefit of using native plants is that they do not require fertilizers or special dirt. In addition, many of them are self-sufficient, which means no pesky pruning and trimming each year.

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Add some new paths!

Even if you don’t own a spacious, parklike yard, adding winding paths and varying materials can help add visual interest that lets the eye wander, giving the illusion that your area is bigger than it is. There are a variety of materials out there you can make paths with, like rocks, sand, pavers, wood chips, and even recycled items, like glass bottles or maybe some old tiles from your bathroom remodel.

Embrace your quirky side!

Don’t be afraid to play with unusual colors and items in your yard. Unique items can create intriguing, eye-catching appeal that will give your garden a more personal charm. Garage sales or antique stores can be great places to find unique “lawn art” or unusual planters. Using varying colors and contrasts, whether in the colors of pots or plants, can help create depth and offer new life to your old garden.

As you can see, when it comes to reshaping your landscaping, there really is no end to the possibilities! By choosing one or more of these options, you can easily have fresh, beautiful outdoor areas for you, your family, and your friends to enjoy.

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How the Real Estate Industry Works By: Michael Repka, Esq. DeLeon CEO/General Counsel

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s the real estate market heats up and commission checks continue to grow, people often wonder how the real estate industry works. This curiosity may stem from interest in a career move or surprise over the size of the commission checks in Silicon Valley—either way, many are surprised by the number of different models employed by brokerages and the varying approaches taken by agents actively working in the industry.

Getting Started in Real Estate Generally, the minimum standards imposed by the Bureau of Real Estate (BRE) are relatively low and a high school diploma is not officially required. The applicant for a salesperson license must be 18 years old, have successfully completed three classes, and pass a background check. An applicant for a broker license must complete five additional classes and have at least two years of full-time real estate experience. Additionally, all applicants must pass a fairly easy test administered by the BRE.

Once the applicant gets a salesperson license, the applicant will need to join a brokerage. Brokerages generally fall into one of many different categories. For example, there are large brokerages that operate franchises all around the country, regional brokerages that operate throughout the Peninsula, and small brokerages that focus on a tight geographic area. Brokerages offer different levels of training and supervision, ranging from minimal to comprehensive one-on-one mentoring or intensive structured programs. Generally, agents are independent contractors who effectively operate their own businesses under the umbrella of the affiliated brokerage. Unlike most industries, brokerages generally face little or no cost to bringing an agent onboard. In fact, many offices charge a monthly fee to agents who want to market themselves as “affiliated” with that office, so a brokerage actually makes a small amount of money even if an agent never completes a

transaction. The monthly fees often cover things such as desk rent, professional liability insurance, computers, and websites.

These fees run from almost 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, the offices with the higher monthly fees pay higher portions of the gross commission to the agent so they tend to attract more experienced, higher-producing agents, whereas part-time agents tend to favor offices with lower fees.

Commission Splits When sellers list a home with a real estate agent, they agree to pay the listing broker a commission, which is not fixed by law or custom and should be negotiated based on the experience, track record, committed advertising spending, and expertise of the agent. The listing brokerage generally puts the home on the Multiple Listing Service and agrees to share with another broker a percentage of the commission if they represent the buyer. Oftentimes, the commission is split evenly between the two agents, but this also varies.

Once a sale is made, both agents will usually split their piece of the commission with the offices at which they work.

The agent usually keeps

70 to 90 percent of the commission, but some offices start newer agents as low as 50 percent. Additionally, some national brokerages charge the agents a franchise fee (e.g., an additional six percent), which may be waived on rare occasions.

Independent Agents Most brokerages treat their agents as independent contractors and, as such, each agent enjoys a lot of autonomy. While this flexibility certainly has benefits, it also results in considerable differences between agents, even within the same office. The same can be said for the differences in the experience, knowledge, and commitment of the agents. Some agents hold full-time jobs while doing real estate on the side, whereas others view real estate sales as a career.

Salaried Agents Some brokerages, such as DeLeon Realty, have switched to hiring agents who are actually salaried employees, rather than commissioned independent contractors who are compensated solely based on how many properties they sell and how much clients pay for their properties. Some clients like this structure because it more closely aligns

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incentives, which builds trust, in contrast to a traditional model where an agent makes more if the buyer pays more. The salaried specialist model costs the brokerages more money as they have to invest much more in the agents. As a result, these brokerages have to be far more selective as to which agents they hire. Generally, these brokerages pay for all marketing expenses, which often results in a higher level of marketing and economies of scale.

Advertising Costs Independent contractor agents generally participate in preparing the home for listing and often pay for all advertising costs.

However, the scope of this participation and the extent of the marketing vary from agent to agent. When interviewing an agent, clients should ask for a marketing schedule to be included as an addendum to the listing agreement and samples of the type of newspaper ads, brochures, video tours, photography, and staging consultation they can expect if they list with that agent. Also, all fees should be spelled out in advance.

Third-Party Support for Agents One of the biggest challenges for clients

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trying to select an agent is sifting through the materials provided by the various people that they interview. A quick visit to any real estate trade show reveals a plethora of options to help agents convey a polished professional appearance. Although this canned, third-party material makes life easy for agents, it makes it difficult for clients to discern much about the agent’s personal knowledge or point of view. For example, rather than create their own website material, many agents subscribe to services such as PropertyMinder and Obeo to provide templated websites. Similar services are provided for newsletters and marketing flyers. Unfortunately, some clients don’t realize that the material they are reading is not the work product of the agent who is providing it.

Real estate is a very rewarding career and sales often result in long-term friendships.

Whether choosing a brokerage to work at or an individual agent to work with, the decision is very important. The time invested in interviewing many options and asking a lot of questions could pay longterm dividends.

- DeLeon Insight November 2015 13

DeLeon Listings How to Choose Paint Colors for Your Home By: Margie Fontanilla DeLeon Design Coordinator

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hen redecorating your home, one of the most important decisions is choosing paint colors. Painting is a quick and reasonable way to give old rooms a fresh, new look. However, you must be careful to match colors with your home’s style and decorations, as well as your personal taste.

The basic rule to remember is, “Use the color wheel.” Colors opposite each other on the color wheel, such as green and red, complement one another and will nicely play off each other. Painting with cool colors such as blues, greens, and purples makes small rooms appear larger and more airy, while colors such as reds, yellows, and oranges will give a room a more vibrant appearance.

Here are several factors you should consider when choosing paint colors for your home: 1. Always start by taking note of the floor’s color. Your floor will usually have a color of its own; even wooden floors have different shades—they may be stained in honey, cherry, or walnut finishes. The shade of your floor will contrast with your walls and thus affect how the paint on your walls will look.

2. Let your creativity lead you. Gather your artwork together and look for a color that stands out. This can be a fantastic way of choosing an accent paint color.

3. The best way to get over your indecisiveness is to start with a color you love. You may find this inspiration anywhere, whether in a simple rug, a favorite accessory, or a pretty fabric. After deciding on your preferred color, test it on the wall.

If the color is too strong, consider asking help from your local paint store in formulating this color so you can lighten it or tone it down by adding some gray paint in the mix.

4. Consider each room you wish to paint. If you will be painting a long and narrow room, you can consider painting the end walls a darker shade than the long, narrow walls.

In this instance, the darker colors will recede and create an illusion of width, contrasting with the lightcolored walls. Deeper colors tend to suit cozier rooms, such as a study or a living room, but may also accent bigger rooms that enjoy lots of light.

However, strong colors can also be used in small amounts to add depth or create a focal point in any room.

5. To make a small room look larger, choose a light-colored wall paint and select furnishings in the same color family. Or, if you are feeling crafty, you can even paint some of the furniture yourself to match the walls.

6. Light-colored ceilings will attract attention and help open up a space.

Dark-colored ceilings give the

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impression of lowering the room’s height and allow more focus on the walls, furnishings, and accessories in a room.

7. The type of artificial lighting used in a room plays a large role in how a color appears within that setting.

Fluorescent lights give off a cool ambience and bring out the greens or blues in a color. Incandescent light bulbs generate yellow light that intensifies warm colors but tends to dull cooler colors. It is important to view prospective colors in both daylight and at night so as to give you a better idea of what to expect, because colors will appear differently depending on the time of day.

By taking these points into consideration, you will be better advised on what to look for when choosing paint colors for your home. Then you can make an informed decision on picking colors that will both fit your style and accent your home’s design.

2 8 0 0 1 A r a s t r a d e r o R o a d , L o s A l t o s H ills O ffe r e d a t $ 4 ,9 9 8 ,0 0 0

Spacious and Convenient Custom Residence Grand spaces with thoughtful details define this private property, which includes a custom-built 5 bedroom, 5.5 bathroom home of 6,025 sq. ft. (per county) and a lot of 1.07 acres (per county). Rich elements like plantation shutters, intricate skylights, and oak hardwood floors will impress your guests, while a central vacuum system, multi-zoned heating and cooling, and considerable storage enable convenient everyday living. The open layout includes a two-story great room and a spacious dining room, while the immense island kitchen opens to the family room. Terrific spaces like a home office, an extensive master suite, and two lofts enhance the home, which also provides two staircases, two wet bars, three fireplaces, and an attached three-car garage. The sizable gated grounds offer a fenced tennis court and a heated lap pool with a spa.

For video tour & more photos, please visit: www.28001Arastradero.com

© 2015 DeLeon Realty

- DeLeon Insight November 2015 15

DeLeon Listings

DeLeon Listings

1932 Em er s on Str eet, Pa l o A l to

2 8 A r a s t r a d e r o R o a d , P o r t o l a Va l l e y

Offer ed a t $7, 988, 000

O ffe r e d a t $ 6 ,7 9 8 ,0 0 0

Tuscan Luxury in Old Palo Alto

Dazzling Country Estate and Vineyards

This custom-built masterpiece combines rich Tuscan style with fantastic modern amenities. A stunning villa of 5,310 sq. ft.

Bursting with European grandeur, this richly updated 4 bedroom, 4.5 bath home of approx. 5,800 sq. ft. (per county)

(per county), this residence offers 6 bedrooms and 6 bathrooms on a private, gorgeously landscaped lot of 9,583 sq. ft. (per

boasts a gated estate of approx. 5.82 acres (per county)! Details like gold-plated bathroom fixtures, onyx countertops,

county) in the heart of prestigious Old Palo Alto. You will love the array of fine features that include art niches, balconies,

and floors of marble, limestone, and Dutch white oak embellish the multi-level interior, which includes two-story living

casement windows, and gorgeous hardwood floors, while the chef ’s kitchen is simply a must-see. Other exciting spaces

and dining rooms, a stone-clad gourmet kitchen, and an opulent master suite with a two-story closet. Additional features

include an enchanting courtyard with a fountain, a decadent master suite, and a walk-out lower level with a rec room.

include three fireplaces, an attached three-car garage, a private study, and a wine cellar that can hold over 7,000 bottles. In

With access to spacious living areas and excellent outdoor retreats, your opportunities for entertainment are endless both

addition to three vineyards, these tantalizing grounds also provide stables, an outdoor barbecue, and a custom pool with

indoors and out. This home is close to Stanford University, while Caltrain, Peers Park, and the variety of attractions along

a spa. Within an easy stroll of local trails, this home’s elite location is moments from prestigious Woodside Priory and

California Avenue are all within walking distance.

convenient dining and shopping attractions.

For video tour & more photos, please visit: www.1932EmersonStreet.com

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For video tour & more photos, please visit: www.28Arastradero.com

© 2015 DeLeon Realty

- DeLeon Insight November 2015 17

DeLeon Listings

DeLeon Listings

1 45 45 Deer P ark Court, Lo s Gato s

185 Fair Oaks Lane, Atherton

O f f e r ed at $ 3 , 988,000

O ffe r e d a t $ 7 ,9 8 8 ,0 0 0

Private Estate with Panoramic Views

Romantic French Estate

Astonishing views can be glimpsed throughout this sprawling 5 bedroom, 5.5 bathroom estate home of 6,172 sq. ft. (per county), which occupies an immense hilltop lot of 3.72 acres (per county). Faced by a brick motor court, this highly customized residence offers soaring ceilings, cherry hardwood floors, multi-zone heating and cooling, and crystal-studded chandeliers.

Airy living areas include a sunken great room, a formal dining room, and a lavishly remodeled kitchen opening to a family room. The immense master suite provides an opulent bathroom, while a well-appointed in-law apartment is upstairs. Entertain on the extensive rear terrace, which overlooks the infinity pool and spa. Other terrific features include an off-grid solar energy system, five fireplaces, and a four-car garage. This home’s stunning location is near trails leading into Heintz Open Space, and you will also have easy access to parks like Sierra Azul Open Space Preserve.

Transport your guests to the south of France within this magnificent custom home of 5,494 sq. ft. (per plans) with 5 bedrooms and 5 full and 2 half bathrooms.

Formal gardens join a garage with an additional guest suite with 1 bathroom on these gated grounds of 1.05 acres (per county). Only two years old, this breathtaking construction blends Old World charm with modern luxuries. Hickory floors, frieze molding, and intricate wall and ceiling treatments mingle with chandeliers, antique doors, and marble mantelpieces imported from France. The interior includes formal living and dining rooms, four fireplaces, a wine cellar, and a sumptuous kitchen. A family room opens to a columned loggia, while a gorgeous master suite awaits upstairs. The grounds include water-conserving landscaping, while a breezeway connects to a three-car garage and a spacious guest suite.

For video tour & more photos, please visit: www.14545DeerPark.com

For video tour & more photos, please visit: www.185FairOaks.com

3 30 Jan e Dr iv e, Wood si d e

1 H o m s Co u r t , H i l l s b o r o u g h

O f f e r ed at $ 4 , 488,000

O ffe r e d a t $ 9 ,8 8 8 ,0 0 0

Luxury Estate in Exclusive Setting

Old World Charm, Modern Luxuries

Nestled within the gated community of Meadow Vista, this extensively remodeled home offers 7,930 sq. ft. (per county), 6 bedrooms, 6 full and 2 half baths, luxurious amenities, and a leafy lot of just over 3 acres (per county).

You will have countless entertaining options thanks to the home’s well-appointed design and flexible spaces, like a loft with a kitchenette, a suite with a wet bar, and a wine room suited for over 1,500 bottles. Spacious rooms include a home office, a dining room with a butler’s pantry, an open, gourmet kitchen, and a two-story great room, and all bedrooms have en-suite bathrooms, including the two opulent master suites. The rear courtyard provides a lawn and views of the mountains, while the attached four-car garage offers a rear ATV exit. In spite of this home’s exclusive woodland setting, you actually will be just minutes from Roberts Market, popular dining venues, and Menlo Country Club.

Be enchanted by the Old World elegance of this sprawling 7 bedroom, 7.5 bathroom mansion of 11,425 sq. ft. (per appraiser) that occupies majestic gated grounds of 1.42 acres (per county) in one of the most desirable pockets of Hillsborough. Designed by George H. Howard and built circa 1904, this historic estate boasts formal common rooms, hardwood floors, leaded-glass windows, a wine cellar, and seven fireplaces, alongside luxurious updates like multi-zone heating and cooling and a one-of-a-kind island kitchen. Balconies, period mantelpieces, and a staggering array of authentic features enhance the flexible floorplan, while the immaculate grounds provide a tennis court, a solar-heated pool and spa, expansive lawns, a rear gate, and a detached 2-car garage with 1 additional bathroom. While you will enjoy the convenience of downtown San Mateo and Burlingame, you will also be moments from distinguished Crystal Springs Uplands School.

For video tour & more photos, please visit: www.330Jane.com

For video tour & more photos, please visit: www.1Homs.com

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© 2015 DeLeon Realty

- DeLeon Insight November 2015 19

DeLeon Market Conditions Atherton Snapshot

Cupertino Snapshot

Hillsborough Snapshot

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DeLeon Market Conditions Los Altos Snapshot

Los Altos Hills Snapshot

Menlo Park Snapshot

© 2015 DeLeon Realty

- DeLeon Insight November 2015 21

DeLeon Market Conditions Mountain View Snapshot

Palo Alto Snapshot

Portola Valley Snapshot

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DeLeon Market Conditions Sunnyvale Snapshot

Redwood City Snapshot

Woodside Snapshot

© 2015 DeLeon Realty

- DeLeon Insight November 2015 23

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A Deal You Can’t Miss *Includes: Design, Installation, 1 Month of Furniture Rental and Removal

List with DeLeon Realty before December 1, 2015 and receive a $1,000 gift card to The Home Depot and 25 hours of handyman time. In addition to our many complimentary services, you can use these gifts to help prepare your home for the spring market!

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650.488.7325 | www.deleonrealty.com | CalBRE #01903224 DISCLAIMER The information included in this newsletter is protected by copyright and may not be reproduced or disseminated without the author and DeLeon Realty, Inc.’s written permission. The contents of this newsletter are offered only for general informational, educational, and advertisement purposes. They are not offered as and do not constitute legal advice or legal opinions.

You should not act or rely on any information contained in this newsletter without first seeking the advice of an attorney. Your receipt of the information in this newsletter is not intended to create, and receipt does not constitute, an attorney-client relationship between sender and receiver. The material is not promised or guaranteed to be correct, complete, or up to date and should in no way be taken as a guaranty, warranty, or prediction of future results.

24 DeLeon Insight November 2015 - © 2015 DeLeon Realty

DeLeon Realty respects other agents’ relationship with their clients. This publication is not intended as a solicitation of any listing which is currently listed with any other agent or any buyer that is currently contractually bound to any other agent.