Market trends impact both buyers and sellers but in different ways. If you are buying/selling in a buyer’s market or seller’s market, there are things you need to expect. The real estate market goes through changes that can affect when it’s a good time to buy or sell a house. However, the difference between the buyer and seller market depends on competition. How much competition a seller has will determine how easy it is to buy or sell a house, so it’s always important to consider your timing when investing in real estate.
The real estate market shifts between a buyer’s and seller’s market quickly and sometimes unexpectedly. However, if you’re buying or selling a house, you need to understand what these types of markets mean for you. This article will discuss the differences between a buyer’s market vs. seller’s market to help you make the best decisions.
A seller’s market takes place when there are more buyers than there are homes for sale, creating competition. During this shift, sellers have more power than buyers; they can increase the list price of their home and still expect multiple offers. Negotiation will not be as easy for buyers trying to find a home in a seller’s market and may have to offer more than the asking price if they’re committed to a specific property.
Buying in a Seller’s Market
When buying a home in a seller’s market, it’s always best not to hesitate because you never know when there will be a better offer than yours. However, you have less power in a seller’s market, so you must make better, smarter decisions. This is where working with professional REALTOR® comes in handy to make strategic moves when proceeding with the home buying process. Also, having a preapproval letter from a mortgage lender can go a long way to convincing a seller to choose your offer over someone else’s.
Another tip is to write a personal letter to the sellers when you find a house to place an offer. Getting intimate with the sellers is a great way to make your offer stand out, so you can still get noticed even if you’re offering the same as someone else.
Selling in a Seller’s Market
When selling in a seller’s market, you hold all the power. However, your home should still be appealing to get more offers, start a bidding war, and make the most money on the sale of your house. Depending on your home’s value, you may consider setting your price slightly lower to help garner more attention from prospective buyers. Of course, your real estate agent can evaluate the current market and help you decide if that is a good strategy for your situation at the time.
A buyer’s market occurs when more people are trying to sell their homes than buyers, creating the complete opposite type of competition than in a seller’s market. In this situation, buyers have all the power since sellers are more desperate to find someone to purchase their home. A buyer’s market is ideal for home buyers of all kinds because it increases the chances of getting a great house for a reduced cost or adding a few extras to the transaction to get more out of the deal. Sellers will have to negotiate with buyers just to sell their homes and decide whether it’s worth working with a particular buyer to sell faster.
Buying in a Buyer’s Market
As a home buyer, you should feel confident when shopping in a buyer’s market. Even though sellers on newly listed homes are less likely to change their minds on price, you can target homes that have been on the market for more than a few weeks. Odds are, those sellers are desperate to sell their homes and will be willing to negotiate with you. Of course, you don’t have to limit yourself to old listings, but it will be easier to negotiate with individuals who have been trying to sell their houses for longer.
As a buyer, there are many things you can negotiate with the seller, including having them pay your closing costs. Closing costs are worth several thousand dollars, which can help you decide whether a house is right for you. Sellers may be willing to cover your closing costs in order to sell their homes, which basically means giving you money to buy their home.
Selling in a Buyer’s Market
As a home seller in a buyer’s market, you may have to decide whether it’s worth it to reduce your asking price or take your home off the market until conditions shift back in your favor. While you may have to negotiate with buyers, there is still hope for sellers in a buyer’s market, but you’ll need to be proactive. Instead of waiting for buyers to find your listing online, you should try to attract as many buyers as possible. If you work with a real estate agent, they may have marketing plans that include using social media or other channels to help cast a wider net.
Selling a home in a buyer’s market may also require you to do slightly more work. You’ll need to impress everyone who comes to tour your home. Consider staging so that the space appears more attractive to the buyer. Additionally, you can include incentives to buy your house. For example, if you have a nice chandelier or new washer and dryer, let buyers know those high-end items are included in the price of the home. By taking away a few expenses and hassles for buyers, you can entice them to put in an offer on the property.
While you typically want to buy a home in a buyer’s market, you won’t always have that chance. The real estate market goes through changes, so there may never be a right time to sell or buy a home, depending on your unique circumstances. Of course, you should be aware of the market you’re entering to ensure you have the best chances of success, no matter what your goals are.
Guest article was written by Ashley Nielsen. Ashley Nielsen earned a B.S. degree in Business Administration Marketing at Point Loma Nazarene University. She is a freelance writer where she shares knowledge about general business, marketing, lifestyle, wellness or financial tips. During her free time she enjoys being outside, staying active, reading a book, or diving deep into her favorite music.