Timing the real estate market is a task that baffles even professionals, making it no easy feat for sellers. However, there are a few general rules that you can keep in mind when selling your house to improve your chances of a favourable, lucrative outcome. The main principle is simple in theory: sell high and buy low. Yet the current state of your area’s real estate market must be taken into consideration to make this work for you.
You can best accomplish this by working with an experienced real estate agent who is also knowledgeable about your particular region. A good real estate agent will not only have a strong working knowledge of the real estate industry as a whole, but will also know their local market inside and out. You can compare your options by registering now at LocalAgentFinder, where you will receive proposals from highly qualified agents in your area. This will help you find a good fit for your needs and determine whether now could be a good time to sell.
Three Real Estate Markets
There are three basic states of real estate markets to watch for:
Also known as a cold market, this situation arises when there are more homes listed for sale on the market than interested buyers. A general rule is that if there is over six months’ worth of inventory on the market, it is a buyer’s or cold market. This can lead to average house prices falling, because fewer buyers lead to fewer overall sellers. As a result, sellers must drop their sale prices if they want to move their properties before the market warms up.
On the other side of the equation, there is a seller’s market or hot market. In this type of market, there are more buyers than there are properties for sale. This ensures that nearly every property in the area will sell quickly, due to high demand from interested buyers. A hot market is characterised by less than six months’ inventory on the market, and in some truly hot markets you’ll see as little as only two months’ worth of properties.
The balanced state of the real estate market occurs when there is an equal number of properties and interested buyers. This may be due to the banks offering affordable interest rates, enticing buyers into the market. There will be no huge shift in sale prices in a neutral market, and it tends to be characterised by four months of inventory listed. This type of market tends to be favourable for both buyers and sellers, giving them an even playing ground.
Selling Property in a Cold Market
It’s generally not recommended to put your home up for sale if the market is cold. However, there may be certain life situations that dictate the need to sell as soon as possible, regardless of what the market is doing. If you must sell in a buyer’s market, you’ll want a good real estate agent to help you. You can use the free online dashboard at LocalAgentFinder to get started with finding the right fit. It’s also a good idea to keep the following issues in mind:
- Buyers will expect discounts. The buyer may ask the seller for part or all of the costs of settlement, which can seriously affect your bottom line.
- Lower offers. With the demand for houses much lower than the amount of available inventory, sale prices will take a dive. Expect to receive lower offers, which could lead you to lose equity on the property.
- Buyers making maintenance demands. After they have undertaken a house inspection, buyers will have a clear idea of what needs to be fixed or replaced. They may make an ultimatum that you fix these issues, or lose the sale.
- -Dealing with contingent offers. A buyer may sign the contract of sale with the added stipulation that the settlement will depend on whether they sell their own home. This puts your sale at risk, because in a cold market it will be difficult for the buyer to sell within the allotted time frame.
- You have less control over the contract of sale. In a buyer’s market the buyer may take advantage of their upper hand to give themselves the ability to leave the transaction without penalty. This could leave the seller high and dry right before settlement.
Selling Property in a Hot Market:
On the other hand, if you choose to sell during a seller’s market you’ll find excellent conditions for selling your home. The following are a few reasons why this will be an advantageous time for you to sell:
Higher housing prices. With a high demand for housing and not enough buyers, competition will be running high. You can set the bar higher, even potentially over the listing price.
You can refuse any discounts or concession requests. In a hot market, you don’t need to worry about footing the bill for your buyer’s cost of property settlement. You can also refuse to pay for inspections.
You may not need to worry about maintenance. The buyers will need to pay for their own professional inspections as well as their maintenance. You will increase your chances of selling the home in its current state.
There’s no need to worry about contingent offers. You will have multiple buyers desperate for a chance to bid on your property, which eliminates the need to accept contingent offers.
The seller retains control over the contract of sale. In hot markets, sellers can negotiate shorter periods before settlement. Sellers may also be able to do away with loan contingencies or appraisals.
There are many reasons to wait until the market is favourable before selling your property. No matter what the market is doing, you’ll want to have a qualified real estate agent to help you make the most of your sale. You can get started by registering now at LocalAgentFinder. This allows you to compare agent qualifications in your area and gain valuable advice regarding the current market.
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