While you might occasionally find a market in perfect balance, more often than not you’ll find yourself in either a buyer’s market, where homebuyers have the upper hand, or a seller’s market, which favors those selling their properties. Knowing which type of market you’re in can inform your strategies for the transaction, make your efforts more successful, and help you close the deal faster.
What Is a Buyer’s Market?
In a buyer’s market, there is a larger supply of homes for sale than there are buyers for them, and overall conditions favor the homebuyer. Signs of a buyer’s market:
Listings are staying on the market longer.Sellers are reducing their prices.There are lots of listings to choose from.New home construction is on the rise.
What it means for buyers:
You have more options.You may be able to negotiate more.Prices may decrease.You’ll have less competition. You’ll see fewer bidding wars.
What it means for sellers:
You may need to reduce your price.It may take longer to sell.There is a lot of competition from other sellers.
What Is a Seller’s Market?
A seller’s market generally favors the home seller. It means that the supply of homes is thin and there is not enough inventory to meet buyer demand. Signs of a seller’s market:
Homes are selling for over asking price.There are multiple bids and bidding wars.There aren’t many listings to choose from.
What it means for sellers:
You’ll likely see multiple offers.You may get more than asking price.Your home will sell quickly.You may not need to make concessions or negotiate.
What it means for buyers:
You’ll face stiff competition.You might need to offer more than asking price.You may need to make concessions or waive contingencies.You’ll have fewer homes to choose from.It could take a while to buy a home.You may be outbid or see your offers rejected.
Strategies for Buying in a Seller’s Market
In a seller’s market, you may need to use extra finesse when searching for a home and putting an offer on one. Here are a few strategies that can help:
Move quickly: Houses go fast in a seller’s market, so if you like a home, don’t delay. Make your bids competitive: Bidding under the asking price probably won’t get you noticed in a seller’s market. Get prequalified for your mortgage: This can give sellers more confidence in your offer. Reduce your contingencies: Lots of contingencies may make your bid less attractive to sellers. Include an offer letter: Make a personal appeal to the seller by writing a letter.
Strategies for Selling in a Buyer’s Market
If you’re selling in a buyer’s market, offloading your property may be more difficult. You might want to consider one of these strategies:
Price it right: Make sure your home’s listing price is based on comparable sales in your area. Be flexible: Being willing to change your move-out date or price, leave appliances, or make other concessions can all help. In order to maximize the number of buyers who see your home, you should also be flexible about showing times. Prep your home: Make all necessary repairs, clean the property, and consider staging it before putting it on the market. Be patient: It may take a while to sell your home in a buyer’s market.
Next Steps
If you aren’t sure where your market stands, you may want to consult a local real estate agent. They’ll have their finger on the pulse of local market conditions and can offer you specific strategies for successfully buying or selling in your area.
