We often hear about it being a “buyer’s versus a seller’s” market when it comes to homeowners looking to sell and prospective buyers looking to dip their feet into the real estate market. While these terms are often used, sometimes they aren’t equally as often understood.
When your licensed Thomas Group Realtor® uses one of these important terms, it’s best to know exactly what it means and how it will impact your individual decisions in the marketplace.
What Is a “Buyer’s Market”?
A buyer’s market, simply stated, is when the number of available homes on the local market exceeds current local demands. In this scenario, competition is high as homes are sitting on the market longer.
With increased inventory, prices will generally be driven down, making this a fantastic time for a buyer: It gives them the upper hand and they generally have a special opportunity to score a great deal. In a buyer’s market, a home shopper may have some extra time and leverage in their negotiations, as a seller will be looking for any opportunity to move their property off of the market.
Not only can a buyer secure a better deal, possibly on a larger or more featured home than they had originally anticipated, but if the market is leaning strongly towards the buyer, they may have an extra opportunity to seek further concessions such as seller paid closing costs or refurbishment credits.
What Is a “Seller’s Market”?
On the other hand, a seller’s market is identified by inventory that cannot keep demand with the current amount of buyers in a marketplace. In other words, there are more buyers seeking homes than there are homes available for purchase.
Home buyers may see active listings switch to a “pending” or “under contract” status in a short amount of time – it’s even possible this could happen the very same day a home is listed on the market.
Because of this scarcity, buyers will also notice prices increasing beyond what they may have come to expect as average, and may be surprised to find themselves in a “bidding war” with another buyer even when they enter a full price offer with little to no contingencies.
Can a Buyer Still Get a “Good Deal” in a Seller’s Market?
A seller’s market probably isn’t going to be the time a buyer scores the deal of a century, but they can still find and secure the right house with a licensed Realtor® who is knowledgeable about local trends and has an ear to the market, like those at Thomas Group. A strong Realtor® may even have access to a pocket listing before the property hits the open market. In a seller’s market, it’s more important than ever to be a well-prepared buyer, have a pre-approval letter from your mortgage company in hand, and not be afraid to offer a healthy earnest deposit with a full price offer.
Both scenarios provide challenges and opportunities for both the buyer and the seller. It’s important to not be discouraged if the market isn’t leaning towards your individual real estate goals at the time.
A licensed and experienced Thomas Group Realtor® can help to navigate the unknown waters and create a listing that will rise above the challenge of a buyer’s market with suggestions that will help to set your home apart. That same talented Realtor® can partner with a buyer to make a crisp and concise game plan for the home search process in a seller’s market to ensure that you have an extraordinary plan A, B, C, and even D. He or she will ensure the best actions in the right market so that your needs will rise above the challenging buying landscape.
Ready to sell your home or start the search for a new one? Get in contact with one of our fantastic agents today!