It’s important for both buyers and sellers to know what type of market they’re getting into when pursuing their real estate journeys. Put simply, there are TWO types of markets, a buyer’s market, and a seller’s market. 

In a buyer’s market, there are more homes for sale than there are buyers. This means that the negotiating power is on the buyer’s side, and they usually can score a great deal because there aren’t enough buyers to go around. Even if the seller won’t agree to the terms, the buyer can easily move on to the next home. This inclines sellers to accept low-ball offers, pay for closing costs, etc. Here are some signs that it’s a buyer’s market: 

  • Properties sell for below original listing price with multiple price cuts
  • ‘Days on market’ average increases
  • Population and job growth trend downward
  • Sellers offer incentives to buyers (new flooring, paying for closing costs, etc.) 

In a seller’s market, there are more buyers than there is property for sale. When this occurs, home prices rise, property sells for full asking price or higher, and bidding wars with multiple offers become commonplace. Sellers have the power here, and can sift through multiple offers to find the one that suits them the best. Here are some signs it’s a seller’s market: 

  • Less homes for sale 
  • More FSBO (for sale by owner) signs because sellers are confident their home will sell itself with the high demand of buyers 
  • Homes selling before they are even listed
  • Homes spend less days on the market
  • Job market is growing due to business expansions or relocations 
  • Infrastructure and retail projects are underway

To succeed as a buyer in a seller’s market, where the competition to purchase a home is fierce, you’ll want to take the following tips into consideration: 

    1. Put away your list of demands:

      In a seller’s market, you will lack power as a buyer since there will likely be an abundance of other people making offers on the same home. This means that a seller’s market doesn’t just affect the question of price, it carries over to every other aspect of the deal, too. So think twice before attaching conditions to your offer, such as demands for changes to the home. On the contrary, be prepared to accommodate the seller’s needs! 

    2. Find A Sharp Realtor:

      You want a realtor who is an expert negotiator that can communicate and negotiate on your behalf. It’s best to have a realtor who isn’t afraid to push hard for your best interests and fight for you!

    3. Get Pre-Approved:

      You don’t have time to waste in a seller’s market—get pre-approved or else you will miss your chance at your dream home. It’s also important to know how much buying power you have and your offer will have much more credibility than competing ones where buyers didn’t take this step.

    4. Don’t Be Choosy:

      When the inventory of homes is limited, you probably can’t afford to wait for the perfect house to hit the market. Prepare yourself to adjust your expectations. But if you just can’t settle, consider postponing your home purchase if your situation allows it.