By CLARICE SMYTH
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SELLER'S MARKET VERSUS BUYER MARKET
HOW TO TELL WHICH REAL ESTATE MARKET IT IS
IS IT YOUR MARKET?
In this video, I will talk about Seller’s Market vs Buyer’s Market. PLUS…Several key point considerations you haven’t been told about.
If you are asking these questions you will find the answers in this video. Watch the entire video to gain maximum benefit – NO FLUFF – It’s all valuable information. If you find value in this video be sure to give it a Thumbs-Up and check out the others on my channel. SUBSCRIBE for notification of future videos.
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What Does It All Mean ?
Seller’s Market VS Buyer’s Market. This is a very common concept but it’s often easily confused. Not only in it’s definition but in what it actually means to the Seller or Buyer when it’s their Market to shine.
Seller’s Market VS Buyer’s Market is driven by supply and demand. When there is an excess supply of properties and a shortage of buyers – it is a Buyers Market. Property values decrease during this market trend. When there’s an excess supply of buyers and a shortage of properties – it is a Sellers’s Market. Property values increase during this market trend.
WHAT IS HAPPENING IN EACH MARKET MODEL?
BUYER PAYS MORE
SELLER SELLS FOR LESS
WHICHEVER PARTY HOLDS THE POWER HAS MORE CONTROL IN THESE AREAS
Buyer and Seller Markets are cyclical and are in response to the economy and real estate demand and supply
Although we are all familiar with these markets waxing and waning they are two very distinct markets and it is beneficial to try to understand them. Regardless of which market trend is having its moment, it is not a time for buyers or sellers to sit back and coast through the process to see what happens.
Now we know what a Seller Market and a Buyer Market is BUT What does it mean to the Seller or Buyer? What happens, what do you do in your distinct Market?
WHAT CAN YOU EXPECT….
WHEN IT IS A SELLER MARKET
- Inventory goes down because there are fewer sellers resulting in fewer Days On Market and higher sales prices
SELLER IN SELLER’S MARKET
- Seller may ask higher sale price
- Property may sell quickly
- Sellers may expect multiple offers or competitive bidding for their property
- Sellers may sell higher than asking price (Property must still appraise)
– Sellers may refuse to accept offers with contingencies that would be commonly expected and accepted during a neutral or Buyers Market.
– Sellers may be less flexible about closing and occupancy dates
- Sellers may pay more for next home purchase
- Sellers still likely to sell less desirable properties for higher price than during a neutral or Buyers Market
BUYER IN SELLER’S MARKET
- Inventory goes down
- Buyers may pay higher sales prices
- The buyer may be required to submit a higher Earnest Money Deposit
- Buyer may expect to pay full or above list price (Property must still appraise)
– Buyer may expect to make more favorable offers with few or no contingencies that would be otherwise commonly expected and accepted during a neutral or Buyers Market.
- Buyers may expect to be more flexible about closing dates and occupancy dates
- Buyers may expect fewer seller incentives
- Buyers will not likely find deals
WHAT CAN YOU EXPECT….
WHEN IT IS A BUYERS MARKET
- Inventory goes up because there are fewer buyers resulting in an increase in Days On Market and lower sales prices
BUYER IN BUYER’S MARKET
- Buyers may negotiate the lower sale price
- Buyers may be less flexible about closing dates and occupancy dates
- Buyers may ask for more incentives
- Buyers may negotiate better terms with the seller
- Buyers may find deals in the marketplace
SELLER IN BUYER’S MARKET
- Sellers may expect fewer and lower offers
- Sellers may have to offer more favorable terms, giving more incentive to the buyer
- Sellers may be expected offers with contingencies
- Seller may expect to be more flexible about closing dates and occupancy dates
- Sellers may expect properties to sell slower and will need to be more considerate of all offers received
WHAT YOU MAY NOT HAVE HEARD…
Seller: There is no time to take it easy. If you do, you may leave money on the table.
Have your property market ready. Have realistic expectations. Move with confidence and quickly
In a Buyers Market, you are competing with other sellers and for the buyer to want your home. Staging will show off the advantages of the buyer choosing your property.
In a Sellers’s Market, you can maximize your position by making your property more desirable to an already demanding buyer pool. This may result in you attracting the most qualified buyers and receiving the highest of multiple offers.
WHAT CAN YOU DO IN ANY MARKET
-Sellers may benefit by pricing realistically. Don’t get greedy and lose a sale. Regardless of what the potential buyer might be willing to pay – your property still must appraise to close – unless you have the very very very rare buyer with buckets of cash and no price ceiling.
-Sellers may benefit by having property in top notch condition to attract the creme-de-la-creme buyers.
-Sellers may benefit by Staging your property. Make all necessary repairs. Present your property as a quality product.
Sellers may benefit by have a just in case plan for interim lodging should thee be a gap in occupancy
Seller may need to be wary of too good to be true opportunities to purchase
Buyer: There is no time to take it easy. If you do, it could cost you.
Have your finances in order proper to making an offer. Have realistic expectations. Move with confidence and quickly.
In a Buyers Market you are in a position to negotiate a price that may benefit you. You can maximize your appeal to sellers by having your finances in order, with a pre-approval in hand at time of offer. This may benefit you because it will work in tandem with the lack of buyer competition and could result in acceptance in a lower offer, more incentives, or more savings to you.
In a Sellers’s Market you are competing with other buyers for the same properties. You can maximize you appeal to sellers by having your finances in order, with a pre-approval in hand at time of offer. This may result is your offer being selected over other buyer offers that lack this financial confirmation – even if your offer in not necessarily the highest.
WHAT YOU CAN DO IN ANY MARKET
- Buyers may benefit by getting Pre-Approved for a loan to maximize their position
- Buyers may benefit from NOT applying for any credit cards, taking out personal loans, co-signing for anyone on a loan, or making any large purchases in cash or on credit.
- Buyers may benefit from establishing a budget prior to property shopping and resist the urge to become swept up in buying trend, Patience is key.
- Buyers may need to revaluate their wish-list and edit it to essentials only
- Buyers may need to expand their ideal location to purchase
- Buyers may expect properties that they really want to sell quickly and therefore should be ready to act quickly on any properties they are interested.
- Buyers may benefit by have a just in case plan for interim lodging should thee be a gap in occupancy.
- Buyers may need to be wary of too good to be true opportunities to purchase
THE BOTTOM LINE
Whether you are a Seller or a Buyer, Whether it is a Seller’s Market or a Buyers Market…. There is no pass to being passive in the process of selling or buying Real Estate
You want to be proactive and navigate the market for the best possible outcome and not just let the market dictate your final home selling or buying experience.
You want to strengthen your position and ride the market trend to the best outcome possible for you in your current position.
REAL ESTATE IS ALWAYS A COMPETITION
Regardless of who got the power in the market, you are ALWAYS competing.
Have every to do with finances and the property in order to maximize your position.
SELLERS You are competing for qualified buyers and you are competing for the highest market price.
BUYERS You are competing to have your offer be chosen above all others and you are competing to get the best price on your chosen property.
SELLERS AND BUYERS are competing with one another to close the real estate deal on their terms – as much as possible.
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