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Rules for Buying, Selling in Uncertain Markets. Rules for Buying, Selling in Uncertain Markets
There's no way to predict with accuracy whether home prices will rise or fall in over the next year. But there are some general rules you can follow to make sure that your housing decisions are smart ones.
BusinessWeek magazine analyzed the behavior of buyers and sellers in the current housing market and recommends a few ways to traverse the rapids.
Before buying or selling, assess what houses are really worth in the area.
Don’t be foolishly loss averse. Some people who bought high and are seeking to avoid selling low gamble recklessly that the market will rebound and bail them out, but dallying often worsens the problem. The solution: Cut your asking price and make the sale.
It's human nature to think you know what you're doing. Reality, however, is often unkind. Whether you're a buyer or a seller, make a plan that accounts for worst-case scenarios.
Sellers' thinking tends to be six months behind the market. So when prices are rising, they set theirs too low, and when prices are falling, they set theirs too high. So assess where the market is headed, not where it was.
Source: BusinessWeek, (04/10/06)
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