The real estate market is cyclical in nature. The market experiences up times and down times. It does not always stay up and it will not always stay down. The down time always follows the up times. If the market is hot or in the up market as it is referred to, do not hold on to any property that you want to sell for too long because such seasons do not last forever, and you can never tell how long the down market would last once it begins.
A buyer’s market is a season in the property cycle when supply of property for sale is much more than the number of willing and able buyers. This situation gives the buyer’s more options and greater bargaining power. Properties usually stay longer on the market during this season.
The opposite is a seller’s market where demand is more than supply. In this market the buyers are much more than the seller and because of competition among the buyers for the few properties in the market, the seller can play them against each other and get higher prices .We need to understand what we need to do in either market so that we could buy or sell successfully.
A buyer that would like to sell in a buyer’s market should understand the nature of the market. If he or she is working with an agent, this is one of the first set of information that the agent should discuss with his client to avoid creating a wrong impression. Quite naturally, most sellers have a higher than normal estimate of the value of their property. It is important for them to adjust this expectation to closely conform it to reality. A good agent will provide you with a balanced understanding of the market.
One of the easiest ways of understanding the current state of the market is to start looking at recently sold or about to be sold properties in the market and how much they were sold for. You should concentrate on properties within or close to the area that you are targeting. You should take note of the time the property was sold as well.
The real estate market can experience major swings in price within a very short time. At other times it could be impacted by government policies in such a way that it changes the dynamics of the market. Therefore you cannot insist on the price a similar property was sold because the context could be different.
In a market that has so many properties for sale, you should consider what you can do to make your property stand out. While we do not advocate over- spending on a property for sale, we do know that some small improvements could make your property look more attractive. Sometimes it could be a little thing that is putting buyers off or giving your competitors an advantage. If there is an item that most intending buyers or agents keep referring to, then you should take a closer look at that item.
In a buyer’s market, you should be flexible and open to negotiation. Re-evaluate your price to the market to ensure that you are still competitive. Even when you intend to say no to an offer, do so politely and make a push to get the buyer to proceed by offering slight incentives such as a price discount. You can also provide your agent with a good incentive to market your property vigorously by agreeing to pay the appropriate fees. Marketing is very critical in a time like this and if your agent is not properly motivated, they may not invest enough in advertising.
It is not always a bad thing to sell lower than your previously anticipated price. Except you are thinking of cashing out of the property market entirely, remember that this is also a good time for you to buy. If you are selling lower because the property market is down, you will also get a property to buy at a lower price.
When you consider the time value of money, it might not be a good strategy for you to insist on a high price that you are unlikely to get in a buyer’s market. Remember, if you hold on to the high price, your property will likely stay longer on the market and when you eventually sell it at the high price you will likely buy higher because it means other property prices have risen higher as well.
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