Major Factors Influencing Your Offer Price
A hot market
is often referred to as 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 involved.
Sometimes homes even sell above the asking
price. Though most buyers want to get a "deal" on a home, reducing your
offer by even a few thousand dollars in a seller's market could mean that someone else will end up getting the home you desire.
A slow market
is often referred to as 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 as a buyer to be
more flexible in offering a lower price for the home. Even if your initial offered price is too low, the seller is likely to make some sort of
counter-offer in response and you can begin negotiations in earnest.
More often
than not, the market is simply holding "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 else has made an offer on that property for 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.
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Gretta Sheffer Minnema
Re/Max College Park Realty
(562) 472-8929