Real estate is volatile; income in real estate is uncertain. In this case, you just can’t sell any house if it is off-season.
We all have heard these phrases related to real estate investment. Are these true or not? Yes, they are. However, these are limited to an extent.
Just remember, real estate investment is both Science and art. Here, knowledge of the market is what differentiates those who thrive in real estate from those who taper off.
Likewise, let us understand one of the fundamentals of real estate — the market type.
This is predominantly divided into two types — Buyer’s market and Seller’s market. These are market situations or phrases created by factors like interest rates, economy, etc.
Now, let’s delve into what they are and how to leverage them to time your transactions.
What is a buyer’s market?
In simple terms, any phase where the supply (homes for sale) exceeds the demand (buyers looking to purchase) is a buyer’s market. In a thriving buyer’s market, you ought to be looking to buy properties.
When there is an excess of supply, the market corrects itself, and the values of the properties drop. With sellers having negligible leverage during this phase, buyers can find some attractive deals.
The 2008 great recession was the best buyer’s market. On the contrary, most investors failed to leverage the time. Fear is a feature of the buyer’s market, with sellers doing their best to get rid of properties. Therefore, buyers can take advantage of this for best deals with contingencies, repairs, and other concessions.
Repairs and renovations
Sellers do everything in their power to sell their houses. During talks, you can ask for certain repairs or renovations. And during a buyer’s market, it is highly likely that the owner will concede.
With prices falling, several investors buy properties without proper research. To fetch the best value for your money, research extensively in the local and the surrounding markets. You might find owners looking to sell houses for cash which perfectly fits into your budget.
In a buyer’s market, there shall be owners with an ‘I just need to sell my house fast Corpus Christi mentality’. Here is where buyers can slow the process and negotiate aggressively.
Ask for concessions
In continuity with the previous point, negotiation is where you fetch the optimum value for every dollar. Concessions and pushing contingencies are a great way to negotiate.
What is a seller’s market?
Similarly, any phase where the demand (buyers looking to purchase) exceeds the supply (homes for sale) is a seller’s market. And this is considered to be the best time to sell.
Likewise, when the demand is high, the suppliers rule the market. Buyers tend to outbid each other and splurge on properties during this phase.
The sellers have the upper hand during negotiations, too, as there are limited houses for a plethora of buyers. Right before the 2008 recession, there was a solid seller’s market. With housing rates soaring, houses for sale in Corpus Christi were selling in record numbers.
If you are in a seller’s market, here are the top measures to make the most by selling your house.
Reduce the asking price
Contradictorily, reducing the asking price might fetch you a better deal. This provides traction for your house and might lead to a bidding war amongst the buyers.
You are in a position of power and can choose the deals rightfully.
Ease the selling process
A hassle-free selling process is beneficial for both parties in real estate. Hence, from pre-approval to documentation, prepare your house for the selling process.
Quicker the purchase process, the higher the potential for sale.
The number of active listings can help determine the type of market. If there are a lot of houses listed for sale, then consider it to be a buyer’s market. Likewise, if there is a thin listing in your locality, then it is a seller’s market.
Real estate transactions in the past few weeks can give you a fair idea of how the market is. If there are a lot of sales above the asking price, it should be a seller’s market. On the flip side, if there are a lot of lucrative deals, the buyers are consolidating their dominance.
Market your house well
Clean and organize the house to impress the buyers. Decluttering the space helps a lot. You might consider a fresh coat of paint, given it always increases the house’s value by a fair margin.
Now, you know what the markets stand for, but how do you recognize them?
The health of the economy
A recession or a market breakdown equates to an extreme fall in house prices. Despite the fear, it is a credible buyer’s market. And if the economy is booming, the prices rise with sellers gaining traction.
With knowledge, you are now in a better place to make decisions concerning your home. To further ease your selling process, here is the Graham Bellerei group — a local real estate firm. Known for our 3-step process, we buy houses for cash. We provide the much-needed liquidity in the market while reducing the hassles of the sale process. Reach out and let us ensure your home is sold for the right value.