LOVELAND – When it comes to real estate, we’ve all heard the phrase “location, location, location” is the most important factor. While there is some truth to that, there’s another common phrase that may apply to the market: “timing is everything.” When is the best time to buy and what can you expect to encounter in a busy market? In an effort to help you navigate the variables of a booming market, we’ve put together a few pros and cons of buying a home in a hot real estate market.
With a boom in the market, real estate prices begin to rise. Properties start popping up like spring flowers and sellers are more likely to list their homes due to these potentially higher returns. Also, during these warmer months, many properties look their best – making them more appealing to potential buyers. And so the equation plays out: more options for buyers and more potential gain for the seller.
As these market prices continue to rise, so too will the potential to earn extra equity in the home. In a hot real estate market, you will gain equity simply because your home will be worth more. So let the booming market dictate an increase in equity.
You have less time to decide
Time is of the essence! Bidding wars will ensue. Buyers are ready to move and you need to be ready to act. Homes will get under agreement quickly and you’ll have less time to hash out any details or negotiate. It’s essential that you stay up to date on new listings, have a pre-approval ready, and are prepared to submit an offer quickly.
You’ll pay more
Be prepared! With this increase in competition, you may find yourself involved in a bidding war and will have to spend more to outbid competing buyers. This usually requires you to offer more than the asking price – at first to stay competitive – and ideally – win the battle. Hence, expect to spend a little more.
Benefits versus challenges
Although there may be some quick decisions to make and higher prices to pay, a hot market also gives home buyers more options and more potential for quick equity gains. There are really pros and cons with buying in any type of market. The current market offers the added benefit of low interest rates. Discuss these factors with your real estate agent to determine whether now is the best time for you to buy