If you’re looking to buy or sell a home, one of the first things you need to know is how buyers and sellers are faring in your local market. While you might occasionally find a market in perfect balance, more often than not you’ll find yourself in one—either a buyer’s market, in which home buyers have the upper hand, or a seller’s market, which favors those selling their properties. Knowing which type of market you’re in can not only inform your strategies for the transaction, but can also 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 home buyer.
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 lots 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 Property 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 properties to choose from
- It could take a while to buy a Property
- You may be outbid or see your offers rejected
Seasonality can affect the supply and demand in the market. Typically, summer sees higher prices and transactions while winter sees lower prices and less activity. Whether you’re a buyer or seller, the season could help you determine the right real estate strategy.
Strategies for Buying in a Seller’s Market
In a seller’s market, you may need to use extra finesse when searching for a property 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 property, don’t delay.
- Make your bids competitive. Bidding under the asking price probably won’t get you noticed in a seller’s market.
- Get pre-qualified for your mortgage loan. This can give sellers more confidence in your offer.
- 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. In order to sell your home, 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.
Chady Melhem | Property Consultant
Call me for any advice you may need!
Comments (0)