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by Website Programmer
on Thursday, August 9th, 2018 at 9:59am.
You may have heard the terms buyer’s market and seller’s market, but you may not be certain how these terms relate to you and your real estate goals. These two terms describe the relationship between supply and demand in the real estate industry. When you learn more about them, you may be able to better time your buying and selling activities so that you act in a more strategic time. Remember that markets can change between a buyer’s and seller’s market slowly or rather quickly, depending on the economic circumstances. In some cases, there may even be a relative equilibrium between supply and demand. Analyzing these conditions before you decide to buy or sell is a smart idea.
A Buyer’s Market
When you hear that your local real estate market is currently a buyer’s market, this means that the supply of available houses or other property types on the market is greater than demand. Essentially, buyers have an ample supply of inventory to consider. Because of this, they may be in a better position to negotiate with a buyer to obtain more beneficial terms. After all, buyers can easily walk away from one property if they do not get beneficial terms, and they may be able to quickly find another property that they are interested in. From the seller’s perspective, however, the seller should be more willing to negotiate on the sales price and terms in order to clinch an offer from an interested party. The buyer is usually in the driver’s seat, and the seller has minimal room to negotiate exceptional terms in his or her favor.
A Seller’s Market
On the other hand, a seller’s market means that demand is higher than supply. There are more interested buyers and fewer properties available for them to choose from. In many cases, this type of situation creates fast offers from buyers, and a property may not remain on the market for very long. More than that, the seller may receive multiple offers within a few days or less in some cases. Some buyers who are very interested in a property and who want to maximize the chance of their offer being accepted may even offer a price that is higher than the asking price. Unlike with a buyer’s market, the seller holds the cards in this case. A buyer may have little room to negotiate on price, property repairs before closing, the closing date and more. In addition, a buyer may have to make a snap judgment about whether to make an offer on a specific property, and the buyer may need to immediately be available for home tours as soon as new listings hit the market.
Regardless of whether you intend to buy or sell property soon, you may ask your real estate agent about current market conditions in your area. If you intend to sell your property and immediately buy a new property, it may be in your best interest to wait until supply and demand have relatively equalized before you make a move.