Pasadenan's Q&A

"Best anyone can realistically do is tell you the areas that have appreciated in value up to this point" -There they are trying to sell "past performance" again.  They know full well that past performance is no indication of potential return.  In actuality, it is almost the opposite... if something recently "bubbled", it is more likely to fall, and fall harder.So, if your buying and selling costs come to about 13% (excluding the interest and maintenance, and taxes, and HOA....), and you are going to liquidate in 4 years; how much does it have to appreciate per year to "break even"?  1.13 ^(1/4) = 1.031 ---> 3.1% annual.  How does that compare to the consumer price index?  About twice as high?Why don't you just compare to bubbled gasoline?  It was at $5/gallon a year and a half ago.  The bubble collapsed and undershot, going down to under $2/gallon last December.  And it has now stabilized at about $3/gallon.  So in 4 years, it would have to sell for at least $3.25 to "break even".  Well it might, but the dollar would likely be worth that much less, so you are being paid back in deflated dollars.  And the housing market hasn't finished deflating unlike the gasoline, so it is like buying the gasoline at $3.75 now, and hoping it will sell it at $3.25 in 4 years.Thus, it is a "loss", even if you could find something to buy where your interest, insurance, HOA, taxes and maintenance was less than your rent for the equivalent.As long as the government is propping up the market prices with "tax giveaways"..., the market has further to fall, and it will.

"30-year mortgage rates have dropped back down to their record low mark." -If that makes it a good time to buy, why did you mark my answer as "best" that states the exact opposite needs to happen in order for it to be a good time to buy?And as I stated before, if it is such a good time to buy, why are you still selling?  Shouldn't you stop selling homes and start buying them, so that you can put your foot where your mouth is?

Of course we need to point out that Realtors ® do not consider their commissions as part of the cost of a home, nor a loss on the sale of a home.  They just consider it "payment for services rendered".  But the question is, why do you want to pay $15,000 for "services" you didn't need, and wouldn't have paid for otherwise, and that you will never recoup.Of course the Realtors ® want you to pay them.  But there is no way you will find that "expense" worth it to you if you are only staying 4 years.

Very unlikely!  Don't you know what it costs to sell a house?  A minimum of 6% sales commission, plus the termite inspection/repairs, and numerous other costs.  And don't you know about all the other upfront costs when buying?  Inspections, appraisals, loan applications, recording fees,...And don't forget, no matter what you buy, your are guaranteed to have maintenance and repair costs.And in many areas your HOA fees exceed rent.  And don't forget the property tax.Usually, in a 7% annual inflation market, it takes 7 years to "break even".  We are in a falling economy across the entire country.  Thus there is absolutely no way you will break even in less than 10 years if you buy now.

Tiffany -  Yes, we have seen many zoning departments interpret "highest and best" use of a property as what will bring in the most tax revenue for a city, or possibly for a developer.  But we all know that is not the highest use nor the best use, and that it often doesn't properly consider traffic impacts, storm drainage impacts, water usage impacts, power usage impacts, nor any "long term" impacts nor benefits.Likely a good present example would be rain forests.  Everyone kept saying the best usage is to cut them down and plant soy, tobacco, corn, cotton, hemp, or poppies.  But we all know the forests provide a much more important function when they are still living and vibrant; but the economic incentive is not there.  Sure, governments can change to laws to make economic incentives for maintaining rain forests...  But they usually cave in to the mega corporations with major financial and profit motives.  They really don't care about the common people.

"So, why waste our time if you know the buyer is in love with the construction worker"  -That is the issue all parties face when presenting a "proposal" or "offer".  In most cases it is impossible to know up front what other offers may represent, or if there are "connections" or "recommendations"...Sure, for government contracts, there are certain rules that are followed for proposals and proposal review, but that still doesn't prevent the wining and dining that is used to influence such contracts.You don't have such issues in probate court; but then you don't have much time for review either; you are thinking on your feet.  Hopefully you would have done your homework ahead of time, and not get caught in the escalation game.If you already know a seller has a particular buyer in mind, and that the buyer is actually offering something reasonable, you are correct, it is a waste of your time.  But how would you know if there exists such a buyer, and how would you know ahead of time what it would take to change the seller's mind?The only way to know is to make an offer, and in most cases it doesn't take a lot of your time or effort.  So, you make what you think is "your" best proposal, and then it is up to the seller to "take it or leave it".  For only a $50 difference, there are a lot of other things a seller would be more concerned about.  How about letters of recommendation from all the neighbors, and the city planning department?  What about submitting those on your next offer?Regarding a police officer telling you that you are under arrest, that is something you don't want to argue about, but it still is something that will eventually be contested.  If the officer made a mistake, you will eventually have the opportunity to demonstrate that, unless you do something stupid.As Tiffany stated, all that a Realtor asking for "highest and best" means is that they will not counter, and that if they receive something they consider reasonable, they will negotiate with that party and will exclude the others.  And since there is no legal definition of "best", it is up to their own judgment and standards, whatever that is.People even make the same mistake regarding the Bible, assuming God promised them the "best".  Sorry, it isn't there.  God makes no such promises, mostly because there is really no such thing as "best".  Sure, the word "best" occurs several times in the Bible, but those are all in relationship to what we offer back to God in appreciation.  And again, no standards of what is "best" but our own judgment.  What is best, a Fuji or Gala apple?  Personally, I like Fuji, but that is my preference, it doesn't make it the best.  What is best, an apple that is ripe, sweat, crisp, and juicy, or an apple that is perfectly round with no blemishes?  Or one with no seeds?  I prefer the one that is sweat, crisp, and juicy in spite of any blemishes, but again that is my preference, and it doesn't make it "best".

Stating that you have to present your "highest and best offer" has nothing to do with the seller having to accept the highest amount offered.  The seller can sell to anyone they want for any reason they want, as long as they are not violating racial discrimination laws. And as already stated, you have NO IDEA what "best" means to the seller.  It could mean that the buyer's credit rating is 850, and that they have a construction company, and that they have construction documents and are already ready to pull the building permits.  It could mean the seller has already given that party multiple construction loans and has prequalified the buyer for another construction loan.  It could mean the buyer already has a house ready to move onto the lot.  It could mean that the buyer is 3 ft-2 inches tall, or that the buyer has 14 children.  And really the seller has no obligation to give you any reason for their decision.There was no "false advertisement", you just misinterpreted it.You are welcome to try to sue, but you don't have a case.  It is that simple.

oops-2 -If you really want that kind of "bid",  why don't you attend probate hearings?  They have very strict rules on how much each consecutive offer has to be over the previous, and you know who is still in...  I'm sure you can find the notices."highest and best" doesn't mean what you think it does.  You were not at a "public auction".

Of course, I know lots and lots of ways.  So do most people.

Have you overlaid the z-estimate trends?  If not, you should, as they both have been fluctuating, and they really are not that different.  Don't just look at the 1 year trend.  Look at the 5 and 10 year trends as well.