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Buyers' vs. Sellers' Markets



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By : Vicki Hat    99 or more times read
The market is hot, the market is down.

Why do people care much about this? If you are not into real estate investing, you would really wonder why. You will probably just think about the rise and fall for interest because of your personal loans but if you have never actually gone into buying and selling homes, the hot and cold market wouldn't be your priority learning.

However, hot and cold market will become an important concept to learn when time comes. You really do not have to invest in real estate so that you would be moved to understand the kind of market exists. It is also important to those who are dreaming to own their own home.

What is its importance? Buyers, investors and sellers of real estate would know how easy or difficult would it be for them should they buy and/or sell homes. Usually the kind of market would have a direct effect to the prices of homes, to the longevity of the sale, to who has higher competition and to other financial considerations.

You can understand more of this when you read through the concepts being discussed below:

Sellers Market

When it is a seller's market, the number of demand for home sale exceeds the number of inventory (in this case it is the properties for sale). This is where hot market comes. Since there are little properties being offered for sale and many people want to buy homes and other types of properties, home sale become easy. Selling periods are shortened, homes are selling like hot pancakes.

At this point, you can now really tell who is greatly advantaged. The seller has great power to protect their asking price, simply because their commodity is in demand. Buyers on the other hand will have tough competition. They need to present purchase offers that will surely catch the attention of their target sellers.

Buyers Market

When the houses for sale in the market are high but the demand for it is low, this condition will be considered a buyer's market. This is what a cold market is all about. Not much selling activity is going on because sellers are scared that their homes will sit on the market for a long time. Should they sell their properties, their selling price could be lessened in their desperation to convince buyers to buy their homes. If too much selling activities would go on, there will be too much competition among sellers. This will double the difficulty of selling.

The market favors the buyer. If they have a good budget, they can easily get top-quality homes. This time would be a great opportunity for those who are dreaming to be a homeowner.

It is also a great advantage for them since the financing department would do something to encourage loaning. One of their tactics is to lower the interest for mortgage. When the interest is low, people who are eager to become homeowners would come out of their shell and go through with the home buying process; making their dreams come true.
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