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Hot, Normal, and Cold Markets Markets vary by season, location, and local activity. As your agent, I will discuss with you the areas in which you are interested and I will be very candid with you about the nature of the market you are looking to buy into. That way, we can best strategize a successful bid on your new home.
Hot Market
A "hot" market is an extremely competitive market, one that is advantageous to the seller. Inventory may be high or low, but the pool of buyers usually outnumbers the number of homes available. Sometimes, homes will sell as soon as they are listed or even before (in-house, or "pocket" listings in which agents offer "pre-listing" homes to other agents in their office or brokerage, are very valuable in these markets). Typically, during a hot market, multiple offers will be made on a well-priced home and more often than not, homes will sell for more than their asking price. It is even more crucial to be prepared and to be ready as a buyer when the market is hot. It can be easy to get caught up in the bid for a home, but if you are prepared (pre-approved, solid in price range, realistic about your needs), it is easier to remain focused on your housing needs and price range and you are much, much more likely to have win the bid.
Normal Market
In a normal market, there is fairly a large number of homes available and an average number of buyers. This market does not necessarily favor the buyer or the seller. A seller may not have as many offers on their home, but he or she may not be desperate to sell either. Again, it is the buyer's responsibility to be prepared. During a normal market, the opportunities to negotiate are higher than in a hot market. As a buyer, you can expect to make offers at lower than the asking price and negotiate a price at least somewhat less than what the sellers are asking.
Cold Market
In a cold market, houses may be listed for more than a year and the prices of houses listed may drop considerably. This market is advantageous to the buyer. As a buyer, you have the time to make an offer that works to your best interest. It is not uncommon to low-ball and to find that sellers are accommodating to meet your needs. Keep in mind that even though this market is a great time for buyers, you do not want to lose your dream home by being unrealistic. Your goal is to get the your dream home at the best possible price.
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