Home > Blogs > Carla Muss-Jacobs, RETIRED > Carla Muss-Jacobs, RETIRED

Highest and Best . . . CHUM!

By Carla Muss-Jacobs, RETIRED

Industry Observer with RETIRED / State License is Inactive Inactive License Oregon

July 07, 2015 05:50 AM

Image result for chumming the waters to raise housing prices Highest and Best . . . CHUM!

This post was inspired by my own comment made on Conrad Allen's post: What Does Highest and Best Really Mean?

These three words "highest and best" are the listing agents' chum . . . and they're using it over and over again when chumming the waters.

With inventory levels being very low in many real estate markets throughout the Nation, chumming the waters . . . doesn't mean BUYERS have to be lured in. But they are.

I guess it's a basic instinct?

What if . . . the Buyers got out of the water until it was "safe" to go back in?

Hmmmmmm . . . the law of supply and DEMAND would abate if the bait of "highest and best" wouldn't be applied to chumming the waters.

There is a section in the Portland Metro market that should be on TSUNAMI watch!

Listings are going on the market at $225,000 . . . selling for $265,000! And that's WITH conventional financing. Meaning: they ARE appraising. That's a whopper of a price increase: $40,000

We're talking a 2 bed / 1 bath @750 sq. ft. property!

Who do we think we are . . . San Francisco?!?

I don't rely on the appraisers to curtail this. That's a "theory" which isn't holding water in my neck of the woods

Didn't we see this 10 years ago? Only difference with that fiasco was that BOTH interest rates AND housing prices were swelling. And bubble goes pop!

Re-Blog

Comments(11)

Comment

Show All Comments

Sort:

Lou Ludwig

Ludwig & Associates - Boca Raton, FL

Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Carla

The buyers and sellers in Multnomah County Oregon . . . . The sellers are deciding the what they're sell the home for . . . . and the buyers are deciding what they will pay for the home.

Good luck and success.

Jul 07, 2015 09:44 AM

Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

Portland, Oregon's current housing market sounds like it definitely favors sellers in terms of demand, but buyers need to remember that in the long run, the low, low interest rates are worth getting out there and throwing out highest and best.

Jul 07, 2015 10:39 AM

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

We still have too much inventory in my market and so we rarely have multiples and even then I've not seen that much over list price EVER in my market. I think around $10k over on a $400,000 list price is tops for the since I've been keeping stats and that was about 10 years ago.

Jul 07, 2015 10:49 AM

John Meussner

Mortgages in AZ, CA, CO, DE, FL, GA, IN, MD, MN, MT, NC, NJ, NV, OK, OR, PA, SC, SD, TN, TX, UT, VA, WI - Fair Oaks, CA

#MortgageMadeEasy Fair Oaks, CA 484-680-4852

I wish buyers would back off to force the market to shift....it's getting a little ridiculous. I also hope when the market shifts everyone remembers the listing agents out there that have turned into total JERKS just because they can be.

Jul 07, 2015 11:05 AM

Carla Muss-Jacobs, RET...

Portland, OR
Kathleen Daniels, Prob...

San Jose, CA

Myrl Jeffcoat

Sacramento, CA

Greater Sacramento Realtor - Retired

The "willing seller/willing buyer" concept has been part of the appraisal process nearly all the years I've been in real estate. It can get into mischief when inventory is low.

I kind of cringe when folks talk about a bubble right now. So many areas of the country are only experiencing a recovery!

Jul 07, 2015 12:33 PM

Carla Muss-Jacobs, RET...

Portland, OR

Kathleen Daniels, Probate & Trust Specialist

KD Realty - 408.972.1822 - San Jose, CA

Probate Real Estate Services

Carla, in order to be San Francisco or San Jose those homes would have to be selling for a hell of a lot more than $40K over asking. But, your market is heading in the right direction.

Chum baby ...CHUM ... after all, it is shark week.

Jul 08, 2015 12:39 AM

FEATURED IN CRAP-TACULAR

CHUM this! What a bunch of .....

Jul 08, 2015 12:40 AM

Joe Petrowsky

Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT

Your Mortgage Consultant for Life

Good morning Carla. We all understand highest and best, but it can turn into a real problem. A property was offered at $550,000, there were multiple offers which created the highest and best. My client got the property for $585,000 and the appraisal came in at $545,000. Buyer, seller and agents are all upset and the transaction may fall apart.

Jul 09, 2015 12:36 AM

Carla Muss-Jacobs, RETIRED

RETIRED / State License is Inactive - Portland, OR

Joe Petrowsky -- I actually LIKE it when apprasiers DO THEIR JOB!! If the property is not apprasing, and the buyers aren't in the position to bring in the cash to close, then the deal should fall apart, IMHO. A buyer CAN pay anything they want . . . overpriced properties included. But when it's NOT their money they are playing with . . . lenders better hold the reigns a little tighter.

Myrl Jeffcoat -- sure, when it's the buyers money. When they are borrowing it's another matter, IMHO. Now the rates are great, but what about . . . future market value? Sure pay highest and best, and then the market stops moving. Everyone who is a savvy real estate agent knows that the first 5+ years on the life of the loan is interest, cream off the top. The principal loan balance isn't reduced by much. So what happens when, people want to / need to move. The market didn't move at all from the price they paid, and with interest rates having GONE UP in the 5 years (of this example) it costs MORE to buy the house. HA HA HA . . . the bubble bursts once again.

Kathleen Daniels -- shark week . . . who knew?? LOL

Jul 09, 2015 04:10 AM

Praful Thakkar

LAER Realty Partners - Burlington, MA

Metro Boston Homes For Sale

Carla Muss-Jacobs, Principal Broker/Owner - that's the story in all market! And yes, true for appraisals, too!

Another fiasco coming up? Hope no. Not so soon.

Jul 09, 2015 03:13 PM

Debbie Reynolds, C21 Platinum Properties

Platinum Properties- (931)771-9070 - Clarksville, TN

The Dedicated Clarksville TN Realtor-(931)320-6730

Good grief that is crazy. Is a huge bubble being created? I would be cautious if I were a buyer.

Jul 10, 2015 02:01 AM

Comments(11)

Carla Muss-Jacobs, RETIRED

Recent Posts