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Real estate agents often talk about the buyers market and the sellers market, but what does it mean for you? Understanding the difference between the markets and knowing which market you’re selling in can help you get the best price for your home.
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A buyers market occurs when there are more properties on the market than there are buyers. This creates a market where the buyer has plenty of choice, giving them more control. When buyers are in control, it brings prices down as sellers compete to attract buyer attention.
Mortgage rates are usually high in a buyers market.
So much buyer choice removes the urgency often experienced in real estate purchases, and homes usually stay on the market longer before a suitable offer is received.
A sellers market occurs when there are more buyers than homes for sale. This gives the seller more control and creates a sense of urgency for potential buyers.
Sellers are less likely to negotiate on price and may even increase prices because there is more competition between buyers.
Homes are usually snapped up quickly in a sellers market, shortening the average time on market.
Yes, a balanced market occurs when there are as many homes for sale as there are potential buyers. This creates stable prices and avoids too much urgency or creates a lack of urgency all together. Both buyers and sellers find prices reasonable and homes sell within a reasonable timeframe.
Essentially, the supply and demand of property is what drives the market. If supply is high, with plenty of owners selling, and demand is low, with only a few potential buyers looking, it creates a buyers market. The opposite of this creates a sellers market.
A balanced market is when supply and demand are more or less equal.
A buyers market and sellers market differ in three key ways: position of power, buyer expectations and marketing strategies. Understanding these differences can help you make wise choices when selling your property.
The party that holds the power has the opportunity to influence the price of the property.
Knowing who holds the power can help you make decisions that work to the market and bring you the outcome you want.
Different markets bring different buyer expectations. Sellers that do well work hard to understand and meet these expectations.
If you’re selling in a sellers market, buyers expect to receive a turn-key property that’s worth the money. Putting thought and care into how you present your home can make a huge difference.
Read more about adding value to your home with our top 5 tips.
Marketing is a key part of a successful sale, regardless of whether you’re in a buyers market or sellers market.
The type of market you’re in often depends on the local area or suburb you’re selling in. It’s not unusual for some suburbs to be in a sellers market while others nearby are in a buyers market. Here are some conditions that will help you work out which market you’re selling in.
You might find that market conditions fall somewhere in between these two extremes, which likely means you are in a balanced market.
If you’re selling in a sellers market, you have the opportunity to sell quickly for a premium price. Here are some tips to improve your chances of making a great deal:
A good agent can give you an advantage and help you sell for more. They have inside knowledge and lists of potential buyers both of which are invaluable when selling a home.
A sellers market offers no guarantee that you’ll sell for the best price. An agent will help you promote your home to the right buyers, for the right price.
When competition is high, it drives prices up. In a sellers market, you might see property values exploding in your local area. You can increase your confidence in the listing price you set by keeping yourself informed about any local changes in property value and how they might influence it.
You could list your property slightly below market value to encourage interest. The resulting competition should drive the price up.
You should prepare yourself to receive plenty of offers – you may even have buyers fighting over your property. Knowing ahead of time what you want is helpful in preparing yourself for this.
Once you have the initial offers, carefully review each one with your agent. The best one may not offer the highest dollar value; it may be the one with the least conditions and a buyer who is paying in cash.
Only you can decide which offer is the right one for you. The key is taking your time instead of accepting the first reasonable offer.
Once a buyer has chosen a home, they often want to settle quickly. Any delays could decrease buyer interest and lead to fewer offers. Being prepared to make it as quick and easy as possible will increase your buyer pool.
It’s not always possible to wait for the right market conditions to sell your property. Here are some tips to help you sell as quickly as possible for the best price in a buyers market:
It’s safe to say you won’t sell for a premium in a buyers market, nor will your home be snapped up in a matter of weeks. Preparing to sell with realistic expectations will help you:
Most buyer interest happens when homes are newly listed and interest reduces from there. Make the most of it and set the right price from the beginning.
Even when setting the right price from the outset, you need to be prepared to negotiate in a buyers market. If you’re less willing to negotiate on price, try offering incentives to push the sale over the line. You could offer:
One of the biggest mistakes sellers can make is pricing their home high to allow for negotiation later. This often discourages buyer interest right at the time when it should be highest.
Engaging a good agent can make all the difference when selling your house. An experienced agent has extensive knowledge of the market and the local area. Your agent can:
Be sure to vet your local agents before settling on the right one for you. Our article on the questions to ask an agent can help with this. Working closely with your chosen agent will give you the best chance of successfully selling your property.
Professional stagers know how to highlight your home’s potential and put lifestyle appeal on show for the buyer to see. Staging can also gain you a higher sale price, which is vital in a buyers market.
Find out more about staging your home in our article
You should also do any minor repairs and maintenance before listing your home. Your agent can give you tips on where your home would benefit from some care and attention.
Your ultimate marketing goal should be to show your home’s potential to as many buyers as possible. The more people that see your home, the better the chance you will find the right buyer.
Speak to your agent in detail about the marketing strategy they propose and get creative in your own time by finding new ways to get some attention. You could:
Sometimes thinking outside of the box can make a huge difference. Some sellers have offered buyers to stay in their staged home for a couple of days to secure a deal. Find a way to encourage buyer interest that works for you.
Once you have done your research, a good real estate agent is the best person to talk to about the property market. They can share their expertise with you and, by working together, you can choose the best time to sell or achieve a positive sale in a buyers market.
Speak to your local agent today and find the right time to sell for you.
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