Buying A New Home Market - 1442 Words

The choice to purchase a new home in today’s market is very challenging to make after considering the disadvantages and the advantages. The current real estate market decides that today is the excellent time to buy a house as prices and the interest rate are still low. Sadly, many economic signals reveal that the real estate market may not have reached the bottom yet and more losses might be in store for the near future. The choice to buy real estate should be meticulously considered and massively dependent upon the actions of the local real estate market neighboring today’s buyers and sellers. A lot of the main principles of economics such as trade-offs; incentives and opportunity cost directly relate to the home buying decision.†¦show more content†¦In this position, buyers have a provisional advantage over sellers because buyers can demand incentives from sellers to close the transaction or find another agreeable seller. The opportunity cost, or whatever som eone is willing to give up in exchange for what he or she wants, is typically basic because the buyer can simply find another house that meets his or her needs. The opportunity cost for sellers in this market are typically very high as they may waste time with buyers who do not intend to buy their property; time is very important to sellers, but not as important to buyers in this type of market. Sellers are typically highly motivated to sell and can easily become desperate to sell a home quickly in a buyer’s market; buyers can easily take advantage of a seller in trouble. In a seller’s market, buyers stand to lose haggling power such as seller improvements that could help buyers with closing costs because the number of homes available for purchase isn’t as many; buyers will have limited choices of homes for sale. In this position, sellers have a provisional advantage over buyers because sellers can demand full price, cash only, and zero incentive to close the tr ansaction. The opportunity cost is typically essential for sellers in this market because they can simply wait for the right buyer to bid on convenient homes