Are you fascinated by the real estate world? Thinking about purchasing your first or next home? Wondering what exactly it means for you when someone says “It’s a buyers market” or “It’s a sellers market”? Let’s talk about buyers markets and sellers markets, and how they affect you.
In general if it’s a sellers market, that means the sellers have the advantage. Buyers market, buyer’s advantage. What does that mean?
In a sellers market, if the home is priced correctly based on recent market activity, many sellers will be able to very quickly sell their homes for the list price or even higher! You as a buyer should come prepared to make a strong offer for the house you want.
If a seller has their home listed at a fair market value of $225,000 and it’s a strong sellers market, then that seller is likely to get multiple offers in the first couple of days. They could end up signing a contract for MORE than the listing price, ultimately selling for perhaps $230,000 or even more. So to get this home, you as the buyer would need to write an offer to that seller which stands out above the other offers they’re receiving.
With this same scenario in a buyers market, you as the buyer would have advantage. If you’re purchasing in a strong buyers market, you would get to look at a lot of homes for sale. With not many other competing buyers out shopping, the homes you see likely have been on market a long time with their sellers waiting for an offer. When you see homes that have been on the market for many months, most likely the sellers are very ready to sell, even if it means giving a price reduction. In this case, the negotiations should go the other way – in your favor. In a buyers market, you may be able to purchase the $225,000 home for $220,000 or even much less! You as the buyer could get a great house at a money-saving price!
Sellers market equals sellers advantage. Buyers market equals buyer’s advantage. It’s supply and demand. Not enough demand leads to an overload in the supply of homes, which results in a buyers market where sellers can have a difficult time selling and buyers can get bargain deals! Lots of demand (meaning lots of people out shopping for a house) leads to a reduction in the supply of homes, which results in a sellers market where buyers can have difficulty finding a good home and where sellers make more money.
Rob and Lauren can help you determine if you’re entering a buyers or sellers market in your price range and favorite location so that you’ll be prepared to bring the right kind of offer to get the house you want at a good price!