Update from Syd Leibovitch: 3.8 % Sales Tax on Homes and "Robo-signers"

3.8% Sales Tax on Homes
There has been a rumor on the Internet that the health care reform bill includes a 3.8 percent transfer tax on real estate sales. It gives an example that a $500,000 home sale would generate a $15,400 tax bill.

Fortunately, this is not entirely true. It appears there will be a 3.8 percent tax on taxable net income from real estate sales.

The $250,000 for individuals and $500,000 for a married couple are intact for primary residences. The 3.8 percent will be computed on profits over that amount. So if a married couple has a $600,000 net profit from the sale, the tax would be $3,800 (3.8 percent of the $100,000 in profit over the exempt $500,000).

On investment property, this would be 3.8 percent of any net income (profit) upon sale, unless exchanged in a 1031 exchange. This is scheduled to take effect in 2013 and only applies to individuals with taxable incomes over $200,000 and married couples with taxable incomes over $250,000.

Bank Moratoriums
There has also been a lot of talk lately about the so called “robo-signers.” In a rush to process foreclosures as quickly as possible, some lenders hired people to sign-off on thousands of foreclosure affidavits per month.

By signing the affidavits, preparers attested to have personally reviewed each file. But given the rate these documents were being processed, many robo-signers admit they didn’t have time to properly review each case.

Backlash about the practice led some major mortgage servicers to temporarily halt foreclosures until internal investigations are completed.

Most of the robo-signing is related to judicial foreclosures. In California, foreclosures are non-judicial. California requires lenders to sign a document that certifies they made attempts to reach borrowers and offer different options to avoid foreclosure (e.g. loan modifications).

The bottom line is, on average, these borrowers are 18 months behind on payments. The robo-signer issue is a technicality that’s not likely to stop foreclosures altogether for most of these borrowers. It will probably just delay things for a few weeks.

Walk-in Leads to Multiple Listings for Sherman Oaks Agent

Derick Vallance knows the value of working floor time. In a recent case, a young woman walked into Rodeo Realty’s Sherman Oaks office at about 6 p.m. with the L.A. Times Homes Section in-hand. She asked if she could speak with somebody about listing a home.
Vallance was on floor time and took the meeting.
The woman needed an agent who could get two houses on the market the next day, host open houses by the weekend, and somebody who was not going to make a bunch of empty promises.
In two days, and with the help of the Rodeo team, Vallance had ads running in the newspaper, professional quality signs in place, photos of the properties, color brochures, lock boxes, and flags and balloons for the open houses. The open houses were a success.
The client came back the next week and asked him to list and host open houses for three additional homes. Vallance plans on spreading the open houses out a little bit in order to give each one his full attention.

Syd Leibovitch: September Wrap-up, Looking Forward

The month of September brought unexpected financial data showing more strength in the economy than was forecasted in early August. If you recall we were told in August that the economy was slowing and the recovery, which was slow, was losing steam.

September brought better results than were expected and the double dip talk has stopped. September marked the largest September gain in the Dow in 71 years! The Dow rose 773.33 points, or 7.72 percent, the best September result since 1939. At the beginning of October, retail sales and consumer spending were also reported up more than expected.

What does this mean for us? I think this means a more optimistic consumer. We have already seen sales (open escrows) rise after dropping unexpectedly in July. Going forward I would predict:

1. Slightly higher interest rates in the coming days and much higher over the next year.

2. Banks have drastically improved their balance sheets to where they are very well capitalized. (The opposite of a year ago). This will enable them to get rid of non performing loans at a higher rate which will mean more REOs.

3. Inventory levels have doubled since January and it appears will continue to increase. This increase has been due to an increase of non-distressed sellers who are buying up, and the increase in distressed properties I am predicting.

Certainly, in my mind this could keep prices from rising, and even put a little downward pressure on prices, although I think a more optimistic public will cause more sales and keep this minimal, if at all. 

The extension of the $729,750 loan limits will also be a huge help. If your clients are waiting for higher prices to sell, I don’t see that happening in 2011. For buyers I just don’t see it ever being more affordable than now as higher rates will more than offset drops in price as far as low payments, in my mind.

To sum all this up. Uncertainty is a “deal killer”. I see less uncertainty going forward than any time since the end of 2007 when the mortgage credit markets collapsed. It looks like we are nearing the end of what was one of the toughest real estate markets ever.

I am quite optimistic and very grateful to all of you. Thanks to your hard work the last few years have been pretty good for Rodeo. I think economists are going to look back at September as the turning point in our economy. Let’s see if that ends up right.

Have a great weekend and GO SELL SOME HOMES!


Derrick Vallance knows the value of working floor time. That’s because a young woman recently walked into the Sherman Oaks office at about 6 p.m. and asked if she could speak with somebody about listing a home. Vallance took the meeting.

The woman, who works with an investment group, was blunt: She needed an agent who could get two houses on the market the next day, host open houses by the weekend, and somebody who was not going to make a bunch of empty promises. She said she had just fired an agent from another firm who lied about hosting open houses.

“If I weren’t at Rodeo and working late, this would have never happened,” said Vallance, adding he recently moved back to L.A. and has been working hard to re-establish his real estate businesss.

He took the listings. In two day’s time, and with the help of the Rodeo team, Vallance had ads running in the newspaper, professional quality signs in place, photos taken of the properties, color brochures, lock boxes, and flags and balloons for the open houses. The events were a success, he said.

The client came back the next week and asked him to list and host open houses for three additional homes. He accepted, though he plans to spread the open houses out to give his full attention to each one. If all goes well, the client plans on listing seven or eight more properties with Vallance.

The Winnetka Palace

Joe Goldin of Rodeo Realty’s Encino office is listing what is no doubt a one of a kind estate! Situated on a private lot in Woodland Hills, the 8,000 square foot home was rebuilt in 1994 from the ground up.
The floorplan features 8 bedrooms, 9 bathrooms, gourmet kitchen, marble floors, office and gym. The backyard includes pool, spa, mature landscaping and large patio for entertaining.
The interior went through a major re-design in 2008 to create what can only be described as a royal Italian/Mediterranean palace. The owner spent a small fortune on the interior, including custom high-end chandeliers and using a hefty dose of Vercase material and decor!

Joe Goldin just reduced the price of the property to $2.2 million. And he’s planning on doing a broker’s open house in the very near future. For more information and photos visit http://www.thewinnetkapalace.com/.

Beverly Hills Estate With Long List of Celebrity Owners

Talk about a Beverly Hills house with some history! A few of the celebs who’ve called this estate home include: Bert Lahr –the lion in the original Wizard of Oz; Betty Grable; band leader Harry James; the Osbourne family; Paul McCartney; and Melanie Griffith.
Originally built by Paul R. Williams in 1941, the walled and gated estate sits on 1.3 acres of flat park-like land. The main house is approx. 12,000 square feet and includes 6 bedrooms, 7 baths and 3 powder rooms. Interiors are by Ralph Lauren.
The lower level features a media room with wet bar, and a wine cellar and tasting room. French doors open from nearly every room in the estate. And the main house has an attached three car garage.
The 3,000 square foot secondary house has two bedrooms, two and a half baths, a separate driveway, private entrance and two car garage.
A third newly built structure has a vintage two lane bowling alley, game room, wet bar and powder room. Putting green, pool, Koi pond, sports court and separate gym complete the estate.
The home is listed by Joe Babajian of Rodeo Realty’s Beverly Hills office. List price is $28.5 million.

Gospel Music Visionary Places Calabasas Home on the Market

Vicki Mack-Lataillade is selling her home in Calabasas. The gospel music industry executive and visionary was founder and owner of GospoCentric Records and B-Rite Music.

Multi-platinum award-winning artists/projects she worked with include Kirk Franklin, Kelly Price, Kurt Carr, God’s Property, Dave Hollister, and the Gotta Have Gospel Compilation.Billboard Magazine even named GospoCentric the top gospel label in America at one point, with sales of more than 30 million CDs.

The 6,000 square foot, five bedroom, five bath, one story estate is located in the gated Park South community of Calabasas. It’s on a full acre lot and Mack-Lataillade is the original owner. The home includes great rooms, 25 foot ceilings, granite countertops, marble and hardwood floors, a sweeping stair case that leads to the upstairs bonus/media room, mountain views, pool and more.

Ken Marker and Corey Brown of Rodeo Realty’s Sherman Oaks office are co-listing the property for $1.999 million.


If you’re looking for a fun activity on Saturday, September 25th that supports a great cause, check out the annual Wag n’ Walk fundraiser in Simi Valley. Rodeo Realty agent Sharon Staples is one of the event organizers and will be participating with her three rescue dogs Missy, Maui and Buddy.
What: The annual Wag n’Walk is a fundraiser for Animal Rescue Volunteers of Simi Valley. The walk is 3 miles and takes animal lovers and their canine companions through the Rancho Simi Community Park and surrounding areas.
Team Staples
The event includes:
• Complimentary breakfast for registered walkers during registration and prior to the walk. Walkers that raise at least $100 receive a goodie bag and an event T-shirt. And there will be secret roving judges during the walk awarding prizes during the walk to your canine companions.
• Silent auction during the entire event. Bid for items and check back to ensure you’re still the top bidder. Tremendous deals have been won at previous events! At the end of the event, payments are collected and auction items are distributed. Items must be picked up at the end of the event.
• Fundraising prizes will be awarded and there will be a raffle for walk participants after the walk.
Who: Animal lovers, dogs, families and anybody who wants to walk for a good cause are welcome.
(Team Staples’ Missy, Maui and Buddy)
Where: Rancho Simi Community Park amphitheater in Simi Valley
When: Saturday, September 25th 2010. Walker registration and breakfast starts at 7:00AM. The walk starts at 8:00AM. The event ends approximately at noon.
Why: All proceeds go to benefit Animal Rescue Volunteers (ARV), Inc., a non-profit organization that began in 1994. The group works with local animal shelters, veterinarians, and other rescue groups to locate animals most in need of care. It places animals in foster homes and hosts weekly adoptions.
Contact: Sharon Staples, (805) 501-0756, Animal Rescue Volunteers, (805) 579-8047, or visit: www.arvsimi.org

Heidi Montag's Lease Listed For Sale

Brian Stevens’ Malibu listing made L.A. Times Hot Properties this week. Here’s some of what reporter Lauren Beale had to say:
Reality TV star and singer Heidi Montag has been hiding out by the beach this summer at a Malibu place she rented for $25,000 a month, according to the Multiple Listing Service. But she moved on in late August, and the gated contemporary is back on the market at $5.5 million.

Yes, that’s Heidi of “The Hills,” as in Heidi and Spencer, as in soon-to-be divorced Heidi. Lost? Backing up, Montag began dating fellow cast member Spencer Pratt while working on “The Hills” (2006-10). The pair eloped to Mexico in 2008 and, just for good measure, got married again stateside last year. In July she filed for divorce.

The acre-plus property where she made her summer home has a saltwater lap pool, tropical landscaping and mature trees. The kitchen has a blue glass sink, an eat-in center island and a skylight; the master suite has a two-sided fireplace, a wet bar, dual closets, a sunken tub and shower for two. There are 6,636 square feet of living space in which to lose oneself. The five-bedroom, six-bathroom house, built in 1972, is also available for lease at $19,500 a month, furnished, with a year lease.

Home Once Owned by Elton John, Joan Collins and Christine McVie

This gated and private East Coast traditional view estate is located in the star-studded Crest Streets of Beverly Hills. Not surprisingly, the home has a long list of former celebrity owners including: Christine McVie of the rock band Fleetwood Mac, Joan Collins, and Elton John.

The estate is on more than ¾ acres of lush, park-like grounds. A large motor court entry leads to a majestic home that features flagstone exterior and slate roof.

Interiors are elegant and comfortable, with wood floors and wonderful spaces for entertaining. The living room features a marble fireplace and French doors that lead to a covered patio overlooking the landscaped grounds and breathtaking city, mountain and ocean views.
The formal dining room also features French doors that open to a fragrant rose garden. The centerpiece of the home is a gourmet kitchen with center island, breakfast area, pine cabinets, exposed beam ceiling and top of the line commercial stainless steel appliances. An adjacent family/media room with oversized fireplace and built-in bookcase plus separate den/office with fireplace are also featured.
The master suite offers tranquil city and ocean views, an oversized fireplace and a gorgeous master bath with dual sinks, spa tub and steam shower with ocean view. Three additional bedroom suites complete the interiors. The lush and verdant grounds include several flat grassy areas, a swimmers pool, sun deck and pond with shady gazebo.
Joe Babajian of Rodeo Realty and Judy Cycon of Prudential California Realty are co-listing the property. The price is $7.45 million. For more information visit: http://www.lloydcrestestate.com/.