Buyer's Market and Seller's Market: What's the Difference?

A Buyer’s Market or A Seller’s Market

What’s the difference?

As you know, the real estate market is subject to change. Whether its due to a new law passing, a downturn in the economy, or any other reason, the price and supply of homes will be affected as a result. 

If you are planning to buy or sell you'll want to understand what type of market you find yourself in, so you know how to reach your goals. Starting with some research is always a good first step.

Now, you’ve likely heard the term “buyer’s market” or “seller’s market” thrown around, but what exactly is the difference? What does each type of market mean for those who are considering looking for a new home or selling their current property? 

Let’s take a look at each type of market, and what to expect whether you're a buyer or a seller. 

A BUYER'S MARKET

Definition: There are more listings on the market than there are buyers.  

What it means for buyers: Due to the excess amount of listings, buyers have more options and are more likely to get a home for a lower price. They can often negotiate more of their own terms when putting in an offer. Therefore the market is more so the “buyer’s market” since they hold more power. 

What it means for sellers: Since buyers have more options, there is less competition for each property. Homes are also more likely to stay on the market longer. Sellers might have to list at a lower price to attract buyers or agree to a buyer’s terms to get their property sold. 

A SELLER'S MARKET

Definition: There are more buyers than there are available listings.

What it means for buyers: It takes a buyer longer to get an offer accepted, since there is more competition for each property. Buyers might also face a bidding war, and find that properties they are interested in sell quickly. Buyers might choose to bid on a property listed at a lower price point than what they are approved for, knowing properties that are listed at their actual budget will probably sell over asking- potentially well over asking. 

What it means for sellers: Since there are more buyers than listings, it’s an ideal scenario for sellers. Increased competition leads to multiple offers, and therefore higher sale prices. The seller can also set more of their own terms, and are less likely to have to negotiate. 

Each type of market offers unique opportunities, and requires different strategies to achieve your real estate goals. Whether you’re buying or selling, it is a good idea to get professional advice about how to proceed. 

Enlist the help of a real estate agent with experience working in your specific area and with your housing type. Backed with this experience and knowledge about the current market, you can be confident that your next venture into real estate will be a success. 

See also:     5 Secrets For Selling Your Home FAST

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