It can be hard to know when to sell your property to maximise the return on you’re investment. Getting the timing right can be tough. To start with it’s a good idea to look out for the three real estate markets to look for:
- Buyer’s market – when there are more listed homes than buyers on the market. The general rule is that if there’s six or more months of inventory on the market it’s a buyer’s market. The result will be sellers will have to drop their price if they want to sell their property before the market heats up.
- Seller’s market – when there are more buyer’s than properties for sale. The result will be properties will sell quickly. The general rule is if there’s less than six months of inventory on the market, it’s a seller’s market. A really hot market might have less than two months worth.
- Neutral market – when there is an equal number of properties for sale and interested buyers. This state often occurs when banks entice more buyers into the market with low interest rates. The general pattern is about four months of inventory listed on the market. The result will be no big changes in sale prices.
It follows that the best time to sell is obviously when the market is hot. Prices will be on the up and as a seller you start to refuse discounts or concessions or to pay for inspections. Nor will you have to pay for the buyer’s cost of property settlement.
You can also save money on maintenance as you will be less likely to need to spend a lot to get the property ready for sale – it will probably sell in its current state.
If you’ve got multiple potential buyer’s looking at your property you are unlikely to have to worry about accepting a contingent offer. You’ll also have more power to negotiate shorter periods of settlement and do away with loan contingencies or appraisals.
On the flipside, ideally it is not ideal to try to sell in a buyer’s market but sometimes people need to sell their property as soon as possible due to circumstances beyond their control. If this happens to you it’s a good idea to employ the services of a good real estate agent who specialises in your area.
If you do go ahead you can expect the buyer to chase after discounts when it comes to the costs of settlement, as well as looking to buy your property with a lower offer.
Buyers will also probably look to make demands when it comes to maintenance, saying unless certain maintenance issues aren’t fixed they won’t buy.
You may also come across buyers who put forward contigent offers such as they will buy if they also happen to sell their own home. Your settlement is under threat in these circumstances because as the market is cold, they will probably have a hard selling.
You’ll also have less control over the contract of sale, buyers might look to leave themselves the ability to walk away from the deal just before settlement leaving you high and dry.
