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Sellers or Buyers Market: Maximizing On Real Estate Deals

Sellers or Buyers Market: Maximizing On Real Estate Deals
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    The property market has its ups and downs, but it takes a keen investor to know when to close or walk away from a deal.

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Knowing whether the current market is a buyers or sellers market is important if you’re going to capitalize and take maximum advantage of the property sale or purchase. So what’s the difference between these two market situations in the real estate industry?

Buyers Market:

A buyers or cold market basically means that there are more property offers than buyers. In this situation, buyers are more in control and better placed to push for lower prices. Of course another advantage of being in a buyers market is the availability of relatively cheap property deals in high end neighborhoods.

So how do you know you’re in a buyers market? Simple, this is when the ratio of sold houses to listed properties is approximately 7 to 20. Property owners in this case must work harder than usual to make their properties more appealing to buyers and this might mean a lot of expenditure on renovations (another win for buyers…) and advertising.

Sellers Market:

In a sellers or hot marketer, the buyers outnumber property offers and this becomes favorable for property owners wishing to sell. This scenario presents sellers with the opportunity to land the best prices as buyers compete to close on the few available deals by outbidding each other.

So how do we get to a sellers market? Unlike in the buyers market ratio, here we have 3 sales from every listing of 5 properties. Buyers in this market should involve professionals such as real estate agents and home inspectors so that they can ensure they get value for their money because chances are they will be paying a bit higher than the market price.

Balanced Market:

A balanced or Neutral market is a market situation where both sides are well balanced and most deals are most likely to be closed at the current market rate (depending on location/neighborhood). How do you know you’re in a balanced property market? The prices are stable with no rampant increases or decreases plus the demand and supply are almost at an equilibrium.

To Buy or Not to Sell…Which Way to Go?

The decision to sell or buy really depends on the individuals involved and the nature of the deal. Sometimes interest rates may keep buyers from taking the plunge and emergencies may force a property owner to accept less than the current market price. What is important to note is that a balanced market is very rare therefore it’s always important to find out what market you’re in before committing to any deals or signing any papers. This can save you a lot of frustrations and losses in future.

Home Improvement reference:

view guides in home financing

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