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Buyer’s Market vs. Seller’s Market: What It Means and How It Should Influence Your Strategy

small 3d house sitting on a pile of money“Buyer’s market” and ”Sellers’ market” are two terms used by real estate agents, property investors, and professionals in the property investment space. Blanket Homes says that as a homeowner whose goal is to sell your home at a price far above what you originally paid; you want to understand the meaning of these two terms.

Understanding and benefiting from a buyer’s market

A buyer’s market occurs when more people are offering their homes for sale than people are willing to buy them. That creates a surplus of for-sale homes in the market. Since the supply of homes exceeds the demand, buyers have the edge over sellers.

Sellers must compete with each other for the few buyers in the market. Because buyers are in the dominant position, they can exert downward pressure on the prices of homes in that market. How do you secure the best deals as a buyer or seller in this market?

For sellers:

Ideally, you would like to wait until market conditions favor you before listing your home. But if you have to sell your home in a buyer’s market, you will work harder than usual. The following strategies can help you stand above other sellers in the market:

  • Price your home realistically: Price your home to attract the most attention. You may even price it a little below the market value.
  • Improve the home and stage it: Give your home a facelift, even if all you do is deep clean it. Stage it for maximum impact and create professional images of the property.
  • Be flexible: Be willing to meet potential buyers halfway. You may have to arrange showings at short notice. Offer concessions on some aspects of the deal.

For Buyers

blank houses lined up with one for sale

A buyer’s market is when you should be most active in looking for once-in-a-lifetime opportunities. But remember that buying an overpriced home in a buyer’s market is still possible. Here are a few tips for finding the best deals in a buyer’s market:

  • Don’t buy in a hurry: Look at several homes and stay abreast of current prices in the area. Only make an offer when you are satisfied that you are getting a good deal.
  • Decide the concessions you want beforehand: Sellers will offer those that benefit them the most. Prioritize concessions that give the most benefit in the long term.
  • Use an experienced real estate agent: An estate agent who knows the area will help you find the best homes once they become available or before they are listed.

Understanding and benefiting from a seller’s market

A seller’s market is the polar opposite of a buyer’s market. In a seller’s market, more people are looking to buy a home than people are willing to sell their homes. In a seller’s market, buyers must scramble and fight over the few homes available.

In a seller’s market, homes are barely listed before sold. Sellers are not incentivized to fix their homes or make concessions to buyers, and buyers often have to buy the house “as is.” What is the right strategy for buyers and sellers in this market?

For sellers

  • fully furnished living roomMake the best impression: Sellers in a seller’s market tend to make little effort. Doing more to make a good impression can help you attract the highest possible offers.
  • Review offers carefully: The highest offer may not always be the best. Look at an offer in its entirety before you accept it; consider everything, such as the deposit size and contingencies.
  • Be realistic about offers: Buyers will make offers above your asking price, but unless they are paying cash, remember that they will not get mortgage financing above the home’s appraised value.

For Buyers

  • Be ready to bid above the asking price: In a seller’s market, do not expect the home to sell for its listing price eventually. You may have to bid above the seller’s request to ward off other buyers.
  • Use an estate agent: A competent, experienced, and well-connected estate agent can help you find the best deals before they become public knowledge.
  • Pay cash if you can: Buyers who can pay some money will have some advantage in a seller’s market. Cash buyers can complete deals faster, and they may even be able to bid lower than other buyers.

To sum up, operating in a “Buyer’s market” or a “Seller’s market” can be consistently profitable. But to make money in a “Buyer’s market” or a “Seller’s market,” you need the proper information and the right people.

To learn more about how you can profit in these two very different market conditions…

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