How Sellers Can Avoid the Downsides of Hot Real Estate Markets
There are many benefits to a hot sellers’ market, where there are few listings but lots of buyers, including:
- Less “keep the house perfect” strain on sellers and their families.
- Less cost and effort to improve the condition of the property to make it “sales-ready.”
- Significantly higher sales price than listing price.
Hot markets don’t stay hot for long though. If there’s an urge to sell, it should be done as soon as possible to get the best return on investment.
But getting the best return isn’t the only consideration. Sellers need to think about what their next move will be after they sell. Here are some things to consider:
- If the plan is to buy again in the same neighborhood, market research is essential. The higher price obtained selling an existing home means there will also be a higher price paid purchasing another home if it’s in the same neighborhood. It’s possible for sellers to spend the majority of their real estate profit buying a home that is smaller or has fewer amenities than the home they sold.
- Purchasing at peak market might not be the wisest strategy. Real estate values often increase rapidly. However, buying into a hot market can force someone to buy a home that requires renovations.
- Consider renting until the market cools down. In a hot market, it may be better to rent until the next market downturn. The downside is that hot real estate markets also mean higher rental rates. So it’s important to consider how long someone is willing to live in rental housing before buying another home to live.
- Schools vary. Is the temporary rental accommodation or next buy within the catchment area of current or preferred schools?
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How Sellers Can Avoid the Downsides of Hot Real Estate Markets
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