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6.3
MAJOR
FACTORS INFLUENCING YOUR OFFER PRICE
How
market conditions affect your offer
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.
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