If you have ever been in the early stages of buying or selling a home, you’ve likely heard a friend or family member say, “Good luck! It’s a seller’s market!”
In real estate, it is important to understand that there are two types of markets, buyer’s and seller’s. While they sound similar, it can make a huge difference in your sale or purchase outcome if you know how each one operates and what to expect before entering a market.
What Is a Buyer’s Market?
A buyer’s market is considered to be when more properties are listed for sale than active buyers.
As a homeowner, you may find yourself in this type of market if your house has been up for sale for an extended period of time with little or no interest. If you are selling and the interest rates remain stable, it is not uncommon to drop your price to attract or maintain interest in your home.
As a buyer, you may find yourself entering into a buyer’s market if you keep seeing properties come up for sale and then selling within a week or two of being listed.
If this is the case, it may be more difficult to negotiate with sellers who are used to quick sales and unwilling to offer price reductions.
What Is a Seller’s Market?
A seller’s market is considered to be when there are fewer properties for sale than active buyers.
In this scenario, sellers have leverage in their listings and can expect multiple offers to negotiate on price. As a buyer, you may find that it takes less time to find a suitable home and that competition for each property is fierce.
It may be more difficult to negotiate on price if you are buying, especially if the seller has many competing offers.
Knowing the market can make a huge difference in how smoothly your purchase or sale operates, so be sure to keep this information at the forefront of your mind during any real estate dealings. With any luck, you’ll end up with the right home and deal for yourself!