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Hot Market — Extremely competitive market among buyers, one that is advantageous to the seller. Sometimes, homes will sell as soon as they come on the market, or even before they are listed in the multiple listing service or marketed to the public. Typically, during a hot market, multiple offers will be made on a single home, and more often than not, homes will sell at or above their asking price. It is crucial for buyers to
be prepared and ready to act when the market is hot. It can be easy to get caught up in a "bidding war," but if a buyer is prepared (pre-approved, solid in his price range, realistic about his needs), he'll have a better bargaining position and find it easier to remain focused on his housing needs.
Normal Market — In a normal market, there is a fairly large number of homes available and an average number of buyers. This market does not necessarily favor the buyer or the seller. A seller may not have as many offers on his home, but the homes that are a fair value
will sell well. Again, the buyer should be prepared in advance of making a purchase offer. During a normal market, the chances to negotiate are better than in a hot market. As a buyer, expect to make an initial offer at
less than the asking price and negotiate a final price that is at least slightly less than what the sellers were originally asking.
Cold Market — In a cold market, houses remain listed for extended periods of time, often
up to a year or more. Prices that buyers are willing to pay may drop considerably. This market is advatageous to the buyer. Buyers generally have the time to make offers that work to their best interests. It is not uncommon to "low-ball" a seller's asking price and yet find the seller willing to accommodate the buyer's needs. Keep in mind that even though this market is a great
time for buyers, it is not a time to be unrealistic. Expecting too much can cause a buyer to lose out on his dream home. The goal is to get the dream home, but
with the best possible price and terms. |
