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There are concerns that are common to everyone in the real estate market, whether first time home buyers, speculators, or other types of seasoned home buyers. Everyone wants to get the best deal possible on a great house. There are a couple of factors that come into play when deciding on placing an offer on a house. Chief among these is your budget range, usually determined by the amount for which you have been approved in your mortgage. You don't want to go above this amount, and most of the time you will be looking at houses that have listed prices within a few thousand dollars of this figure. There are other factors that determine how effective your offer is in terms of appeal to a home seller, including real estate market conditions in Richmond.
People who make a living in real estate apply three different terms to market trends. The least common is the seller's market (truly the least common, even though we have experienced this phenomenon in Richmond for the past couple of years). In a seller's market, there are not enough houses on the market to meet the demand of people looking to buy. Houses sell for their asking price, or even higher. In some cases, bidding wars may actually break out right on the driveway!
More common than the seller's market is the buyer's market. This condition occurs when there are a good number of homes on the Richmond market, but not a lot of people looking to move in. It takes a while to sell a house, and there is lots of room for negotiation. Buyers can afford to take their time and make a good deal even when they find the perfect house.
Most of the time, the real estate market is even, or "transition". There is no pressure to make the best offer right away, but there is no incentive on the part of the seller to jump at any offer either.
When it comes to an offered price on a given home, a seller's market will always mean that you have to go to the high end of your projected budget. Sellers are aware that their home can fetch a lot of money, so they won't be tempted to take an offer that they think will get them less than they could receive from someone else. In a buyer's market, on the other hand, you have some leeway with your offer price. You can shoot low and look to negotiate, or you can stand by your offer. There is added pressure on the buyer to make sure that the house is sold, so you can afford to hold out for a good deal.
When it comes to a transition market, the effects on your offer price are not quite as clear. Some owners, used to a seller's market, will be reluctant to go for what they see as lower offers, while others, sensing a change in the wind, will snap them up.
The real estate market seems as though it should be guided by definitive principles, but when it comes to market trends, no one has been able to come up with a sure fire formula for success. What is true, though, is that the state of the Richmond market will affect your offer price, and you need to bid accordingly both to get that perfect home and to make sure that you get a good deal.
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