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Factors
Affecting Your Offer Price
How
Market Conditions Affect Your Offer Price
A hot market is a
"seller’s market." During a seller’s market, properties
can sell within a few days of being listed and there are often multiple
offers. Sometimes homes even sell above the asking price.
Though most buyer’s want to get a "deal" on a home, reducing
your offer by even a few thousand dollars could mean that someone else
will get the home you desire.
A slow market is a
"buyer’s market. During a buyer’s market properties may
languish on the market for some time and offers may be few and far
between. Prices may even decline temporarily. Such a market would allow
you to be more flexible in offering a lower price for the home. Even if
your offered price is too low, the seller is likely to make some sort of
counter-offer and you can begin negotiations in earnest.
More often than not, the
market is simply "steady," or in transition. When a market is
steady, no real rules apply on whether you should make an offer on the
high end of your range or the low end. You could find yourself in a
situation with multiple offers on your desired house, or where no one
has made an offer in weeks.
Transition markets are
more difficult to define. If the economy slows unexpectedly, as it did
in the early nineties, people who buy on the high end of a seller’s
market (like the late eighties) could find their home loses value for
several years. So far, no one has proven reliable in predicting when
markets change or how good or bad the real estate market will become.
copyright 2000 by Terry
Light and RealEstate ABC
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