You can have the perfect home to sell or have a great financial plan in order to buy a new home, but if market conditions are not on your side you may not have the best of luck buying or selling your home. An easy way to look at market conditions is to compare it to the weather forecast. Sometimes the rain will deter plans for vacations meaning if you want to splurge a little, it might not be the best time if you are planning on enjoying the sunshine. In other words, there are various factors (including mortgage rates, income, the economy, and circumstances within the community) that affect the success of your real estate transaction.
In order to avoid getting caught in the rain, your best bet is to plan ahead and make sure you are well informed on your market conditions. Depending on whether you are buying or selling, the market can swing one way or another.
- If you are in a seller’s market, this means that buyers are picking up houses for quick sales and your home will spend fewer days on the market, usually less than six months. There is a greater demand for homes which creates higher prices for competitive buyers.
- If you are in a buyer’s market, there is abundance of homes being sold and they spend longer on the market. In order for buyer’s to get seller’s to budge on sale, they can use financial incentives including lowering prices and paying closing costs. The buyer has the ability to negotiate terms which may be in their favor if a home is on the market long enough. The goal, after all, is a quick sale!
Depending on the conditions, you can increase or decrease your selling points in order to gain a quick sale. If the market is doing well, the ball is in your court and you can increase your asking price because conditions are good. If the market isn’t doing as great, reducing the price of your home will attract buyers if you are looking to sell.
You can learn more about your market conditions from your real estate agent. This paired with a competitive market analysis (which is a breakdown of similar homes sold within your area) are great tools to understand what your listing price will be and how long it will take to make a sale.