Posted by: islamicfinancingnews | July 11, 2013

Islamic finance and understanding market conditions

islam-81 When you’re looking for Islamic finance solutions to assist in the purchase of your first home or next home, it helps to have a general understanding of the real estate market and how market conditions can affect your situation.

For example, a buyer’s market is when the number of homes for sale on the market surpasses the number of buyers looking to buy homes. In this scenario, sales prices tend to be lower and homes usually stay listed for sale on the market longer. However, this could work to a seller’s advantage when making an offer on another property.

The opposite is true with a seller’s market where the demand or number of buyers is greater than the supply or number of homes available on the market. In this scenario, sale prices are higher and homes tend to sell more quickly. This is both good news and bad news for sellers in this market. The good news is a seller may be able to get a higher selling price for their property; the bad news is the seller may end up paying more to purchase another property. Only if the number of buyers equally matches the number of available homes on the market would there be a perfectly balanced market with stable prices and homes selling within a reasonable time frame.

However, since the real estate market is constantly changing, it’s a good idea to talk to your lender to help you understand the impact of these market conditions and to learn more about Islamic mortgages and other financing programs free from Riba.

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