Buyer's vs Seller's Market
What's the difference?
Most consumers do not know the
difference between a Buyer's market and a Seller's market, however they should! There are various benefits and disadvantages for
Buyer's and Seller's in both market conditions.
The principle of supply and demand will determines
which market we are in at any given time.
Buyer's Market
Let's start with a Buyer's
Market. Most consumers seeking to
purchase a home would want to be in this situation. This means the supply of homes are higher than
there are Buyers. As a Buyer, you have a
better bargaining position because there isn't as much competition from other
Buyers wanting to purchase. When you
submit your offer on a home, it is less likely there will be other offers on
the same property unless it is priced below market, is the cream of the crop of
the inventory or it just came on the market.
The demand for houses are down
and the supply of houses are up.
The disadvantage for
a Seller is their homes may sit on the market for a longer period of time while
waiting for a qualified Buyer. If you
are listing your home during a Buyer's Market, a Seller should make sure their
home is in the best showing condition to entice Buyers.
Some tactics Sellers
can use to encourage Buyer's to want their home are by offering more money to
help the Buyer pay for closing cost, paying all of the Buyers closing costs,
buying down the Buyers interest rates for their mortgage and offering to
include a home warranty, etc.
Seller's Market
At this present time,
we are in a Seller's market in my local area. A Seller's market means there are more Buyer's
looking to purchase a home than there are houses listed for sale.
The demand for houses are up and
the supply of houses are down.
If you are a Seller,
this is the ideal market for you. This means the chances of getting multiple offers
on your home are higher. Because of this
demand, you may get closer or exceed your asking price for the sale of your
home.
If you are a Buyer
searching for a house in a Seller's market, be prepared to make a decision
quickly if you see a house you like.
Many houses are going under contract within the first week of being
listed. This means many Buyers are
offering their highest and best offer upon submitting their FIRST offer. A Seller can be more selective in the offer
they chose and not have to give up too much in order to sell their home.
So before you start
your home buying/selling process, make sure you understand the market you are
in. By knowing your market, it will help
you determine what type of offer you will submit and how much time you have to
get your offer in if you are a Buyer or how much you will list your home for and
what type of incentive you are willing to give the Buyer if you are the Seller.
Happy House Hunting!
Tabitha
Rector-Richardson
Broker, REALTOR®
Broker, REALTOR®
email: info@premierhomesmd.com
web: www.PremierHomesMD.com
web: www.PremierHomesMD.com
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