A buyer's market is the ideal time to buy a new home because prices are lower and there are fewer buyers to compete with. During a buyer's market, it's best to take your time because there's less worry about losing a property that interests you. As you've been searching for a home, talking to industry professionals, and reading information online, you've probably come across the terms “buyer's market” and “seller's market.”. And maybe you thought, “What exactly does this mean? Well, we'd like to shed some light on this and explain not only what these terms in themselves mean, but also what they mean for prospective home buyers and sellers.
This also often means that sellers don't necessarily have to accept the buyer's requests to fix items that may arise during the inspection. That's why buyers are strongly encouraged to select an agent who is proactive in finding the right options, making solid offers, and who is well-versed in negotiating, which can help them get the best terms after the inspection. All that said, there are a number of things a seller must do to take advantage of the market pendulum that tilts in their favor. Buyers expect to see the value of the home.
If it's not properly organized, tidy, and in perfect viewing condition, buyers may not see the value in the list price and the property may remain on the market for a longer period of time. A property that has been on the market for a while in a seller's market can be seen as a “red flag” for potential buyers. This is where a great ad agent really shines and earns their commission. Organizing the house, discussing a good pricing strategy and properly marketing the house are things that a good agent will discuss in detail with sellers.
A buyer's market means there's a large inventory of homes for sale. With so many options, buyers have bargaining power. Sellers can lower their sales prices and make more concessions to attract potential buyers. The most significant difference between the buyer's market and the seller's market is who has the power: the buyer or the seller.
As you may have guessed, the power dynamic tilts toward the buyer in a buyer's market and toward the seller in a seller's market. Why? Because in a buyer's market, there's more home inventory and lower prices, empowering the buyer. On the contrary, seller's markets allow sellers to ask for more money and encourage bidding wars, giving them power. Homes sell very quickly in a seller's market due to high demand for housing, while they stay on the market much longer in a buyer's market where demand is low.
If you are a buyer looking to buy real estate in a buyer's market, this is the best time to do so. It's not necessarily obvious what's happening in the local market, but it will make a significant difference when buying or selling. But if you're in a market where buyers are likely to ask you for help with closing costs or repairs, plan ahead. In a buyer's market, sellers compete against a higher percentage of sellers, making them more willing to compromise in negotiations with potential buyers.
When the seller knows that you have a lot of options when buying a home, they may be willing to lower the price they'll accept to close the deal. These market conditions give buyers an advantage over sellers, forcing the market to respond accordingly. With a better idea of what's going on in the real estate market, you'll have the advantage, allowing you to get a better deal on the transaction. It can even get a contingency accepted for the sale of a home in a buyer's market or an expulsion clause.
If the inspection reveals problems that you don't want to fix or that you can't afford to fix, you can lower the asking price or offer the seller a closing repair credit to deal with pending issues. This means that, although there are many properties available, there is a shortage of buyers interested in buying them. These real estate market conditions minimize the buyer's bargaining power and often lead them to accept properties as they are. The key to getting the best possible value for your money is to understand what's happening in the local real estate market, whether you're a buyer or a seller.