Nobody can time the real estate market! This may leave you wondering: If you can't time the market, what does a small investor like me do?
For starters, you can employ the same tried and true methods that have worked so well for so long: Buy low and sell high. The first step is to determine the type of real estate market that exists.
Types of Real Estate Markets
Although there are many different sub-categories, basically real estate markets fall into three categories:
*Buyers markets
Buyers markets exist when there is more houses for sale, than buyers. Because buyers have many homes to choose from, not every home for sale will sell. Most experts agree that if six months or more of inventory is on the market, it is a buyers market.
*Sellers markets
In a sellers market, there are more buyers than available inventory. Because there are fewer homes for buyers to choose among, almost every home will sell. Typically, there is much less than six months of inventory in a sellers market.
*Neutral markets
Neutral markets are balanced. Interest rates are affordable and the number of buyers and sellers in the marketplace are pretty much equal. Inventory is generally around four months, give or take.
Buying in a Buyers Market
Lower sales price
Sellers are more willing to negotiate because they know there is competition and if they refuse your offer, they might not get another.
Buyer can ask for and get more concessions
Buyers can ask sellers to pay their closing costs. Buyers can also expect sellers for inspections, roof certifications and home warranties. They can also expect sellers to make more repairs and/or replace items such as appliances and main systems. Sellers will often credit the buyer for the repairs or fix the problem(s) noted by a home inspector.
Contingent offers are likely to be accepted
Sellers will generally agree to accept a contingent offer that is dependent on the buyer selling the buyers existing home. In a buyers market, a contingent offer is better than no offer.
Buyers are in a position of control
Buyers can ask for longer inspection periods, extend closing deadlines and ask for early possession...terms that would be automatically rejected in a sellers market.
Buying in a Sellers Market
If a buyer has no urgency to buy a home, it's not a good idea to buy in a sellers market. Here are a few disadvantages to buying a home in a sellers market:
Top price
Multiple offers are common. Sellers command list price and get it.
No concessions
Sellers are reluctant to pay any of the buyers closing costs or pay for inspections.
Contingent offers rarely happen
Seller does not want to wait for a buyers home to sell.
Request for repairs are not honored
Sellers will typically tell buyers to purchase the home "as is."
Sellers control the transaction
Most sellers will not bend from the original contract, regardless of circumstances, because there are three more buyers around the corner.
Selling in a Buyers Market
Lowball offers
Sellers in soft markets lose equity. Little demand for homes puts pressure on sales prices, causing buyers to make lowball offers.
Buyers expect concessions
Buyers will ask sellers to pay for closing costs, thereby lowering the seller's net proceeds. All those little things sellers have put off repairing will pop up in the home inspection, and buyers expect sellers to fix them.
Contingent offers are riskier
If a buyers home does not sell, neither will the sellers, and by that time, the number of buyers typically dwindle even more.
Sellers do not control the transaction
Buyers tend to ask for "out" clauses that would let them walk away from the deal all the way to closing.
Selling in a Sellers Market
Higher sales price
The list-to-sales-price ratios are lower in sellers markets, sellers can demand higher prices.
There are very few concession made
Sellers refuse to pay buyers closing costs or inspection. Buyers will still obtain home inspections but do not request for repairs and quite frequently will accept the property "as is."
Contingent offers are rare
Buyers will find it easier to sell their homes and then make an offer. Sellers generally will not accept a contingent offer with so many buyers out looking.
Buyers do not control the transaction
Sellers can negotiate shorter inspection periods and to demand buyers waive certain contingencies such as appraisal or loan contingencies.
Specializing in the Great St. Louis Metropolitan Area with an emphasis on the St. Charles County Market.
* New Home Construction
* Buyers Agency
* First Time Home Buyers
* Member of the #1 Real Estate Team in the St. Louis area - Coldwell Banker Gundaker!
* Member of the most successful residential real estate brokerage company in the nation - NRT
Professional Education and Designations
* RRES - Residential Real Estate Specialist
* NAR - Member of the National Association of Realtors
* MAR - Member of the Missouri Association of Realtors
* SCCAR - Member of the Saint Charles Association of Realtors
* Extensive continuing education to help keep me abreast of market trends and license law.
Personal
From the home search process to financing, to title insurance, and more - straight through to the final closing of your transaction,- I will make it happen, walking you through the process step by step. So, When Buying, Selling or Relocating, for the support you need and deserve, just call (636)346-2455. Serving you is my #1 priority!
For More Information go to http://www.stlouiswholesalerehab.com or http://laurawunder.cbgundaker.com
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