One of the major keys to making successful real estate investments is to understand the buyer’s and seller’s market and their behaviors in order to determine the best timing to buy real estate properties or invest in them.
Let us understand what is a seller’s market and how real estate investors can invest in real estate while the housing market is a seller’s market.
What is a Seller’s Market?
A seller’s market in real estate investing is when, in a certain real estate market, the demand for buying real estate properties by real estate investors exceeds the available real estate properties in the market. The opposite of a seller’s market is obviously a buyer’s market. A buyer’s market refers to the situation when the number of investment properties outpaces the number of real estate investors who are looking to buy real estate properties.
Are you interested to know whether the US housing market in 2018 is a seller’s market or a buyer’s one? Read “Is the 2018 US Housing Market a Seller’s Market or a Buyer’s Market?“
How to Determine Whether the Current Market is a Seller’s Market or Not
One of the major factors in spurring on a seller’s market is a drop in interest rates, which allows more people to be qualified to buy real estate properties or to afford more expensive listings. Moreover, growth in economy and population and increased employment opportunities are also factors that can play a role in bringing more buyers into the market, and hence developing a seller’s market.
On the other hand, to determine whether or not a certain market is a seller’s market, the first thing you should consider is whether the number of real estate properties is increasing or not. Low inventory means there are not many investment properties available for sale in the market compared to the demand of real estate buyers. This is considered as an indicator that the market is a seller’s market.
Real estate properties and listings in a seller’s market sell in just weeks or they take days or even hours. Many sellers in this case hold a bidding as multiple offers come in. When real estate properties and houses get multiple offers, it is another sign that the current market is a seller’s market.
How to Invest in Real Estate as a Buyer When the Market is a Seller’s Market
Purchasing a real estate property in a seller’s market is not an easy task because all characteristics of the market are in favor of the seller, not the buyer. However, buying investment properties in a seller’s market is actually doable with good planning and strategy. Before anything else, it is important to prepare your budget and finances in order to get the best offer as soon as possible as it is not advisable to wait for too long before making the purchasing offer in a seller’s market. Moreover, it is advisable to work with a professional agent and always be prepared for a bidding war. Although real estate investors always look for the best timing to buy investment properties in a specific location and market, sometimes they have to purchase properties in a seller’s market. However, with the right and detailed plans and strategies, you can get the best offers possible as a buyer in a seller’s market.
Do you want to know how to find a buyer’s market? Read “5 Ways to Find a Buyer’s Market.”
How to Invest in Real Estate as a Seller When the Market is a Seller’s Market
Selling a home in a seller’s market is far different from selling a home in a buyer’s market. If you are lucky enough to have a seller’s market in your target market or area, it is indeed the best time to sell properties. Generally, the larger number of buyers for your home ought to increase the odds that you’ll make more money. Even homes that are considered to be hard to sell in any real estate market can stand a better chance selling in a seller’s market. As a seller in a seller’s market, you have to be smart about finding ways to take advantage of the market situation. The first thing you have to do is set the right price for selling your property. When selling your property, you have to make sure not to overprice it or bring its price down by taking into consideration the house’s age, infrastructure, facilities, size and its location. In order to do so, you have to learn how to perform real estate market analysis, which is a process that compares the property you intend to sell to similar properties in the same area in order to make sure you are not setting a too high or low price for the property.
Are you eager to know and learn how to perform a real estate market analysis by yourself without a real estate agent? Then you should check out “How to Conduct Real Estate Market Analysis Without a Real Estate Agent.”
Mashvisor’s Investment Property Calculator
All real estate investors who invest in real estate should use Mashvisor’s investment property calculator, which is a real estate tool that enables investors to look for properties online by giving them access to accurate real estate market analysis on both properties and neighborhood levels. Using an investment property calculator is vital in order for investors to make informed decisions. What is special and unique about Mashvisor’s investment property calculator is that it is easily accessible and provides the most accurate data in order to make precise comparisons. Moreover, Mashvisor’s investment property calculator predicts the rate of return on investment of the target investment properties based on inputs and data provided by users in order to evaluate whether or not a property is a lucrative investment.
Final Words
Becoming a successful real estate investor requires knowledge and an understanding of the way sellers and buyers behave in the market. This is key to determine the best timing to buy, sell or invest in real estate investments. Whether the market is a buyer’s or seller’s market, with proper real estate education, knowledge, networking, and planning, you can always invest in real estate and make successful deals and investments in the market.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.