Timing the Market - What You Need to Know Timing the Market - What You Need to Know

Timing the Market - What You Need to Know

Tuesday, April 17, 2018

First and foremost, experts say you can’t time the market to perfection. In other words, you will never be able to buy with absolute confidence that the market is at an all time low. Similarly, you will never be able to sell with absolute confidence that the market is at an all time high. That said, there are certain things you should know when buying and selling real estate.

Understanding the Market

There are three types of markets:

  • Buyer’s market, where there are more homes for sale than buyers in the market;
  • Seller’s market, where there are more buyers than there are available homes on the market; and
  • Neutral market, where the number of buyers and sellers is approximately equal.

Home Sales in a Buyer’s Market

In a buyer’s market, buyers can expect lower home prices. Buyers can also request concessions from the seller, such as asking the seller to pay closing costs. Buyers can also request pest inspections, a home warranty, or roof certifications. Buyers have the luxury of extending an offer contingent on selling the buyer’s current home.

When buying in a seller’s market, buyers are at a disadvantage. For example, because multiple offers are common, a home’s list price may be just the starting point for purchase negotiations. Sellers are less inclined to agree to pay for inspections or closing costs. Further, sellers don’t have to agree to contingent offers, as they are likely to also get offers without contingencies.

Home Sales in a Seller’s Market

Conversely, when selling in a seller’s market, sellers are at liberty to ask a higher price for their home, because there are fewer choices for buyers. They are more likely to sell the home “as is,” without inspections or concessions as you might expect in a buyer’s market.

Selling in a buyer’s market ensures a lower price as a rule. Sellers must be willing to make repairs or expect to provide the buyers with money to repair things around the home. Sellers have less control of the transaction, due to market saturation.

Imperfect Timing

While you may never be able to time a home sale to the absolute peak or low point of a market, you can make some educated choices. If you have the luxury of time, you can ensure an advantage, whether you are a buyer or a seller.

If You Are Considering Buying or Selling a Home

If you are considering buying or selling a home, contact Global Life Realty. We are happy to work with you, setting reasonable expectations and discussing your buying and selling goals. South Florida has some of the finest real estate worldwide. From luxury condominiums to family homes, we have access to the perfect property for you and your family.

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