Buyer's Market Vs Seller's Market. What's The Difference?

Whether looking at buying or selling property, it helps to know if you are in a buyer or seller's market before you start. The property market is constantly changing and is influenced by many factors. Understanding the current state of the market can put you in a position to get the best deal if you are looking at selling or buying. 

Not sure what these terms mean?  That’s ok we are here to help. Let's talk about what a buyer’s or seller’s market is and how you can identify them. 

What is a Seller's Market? 

A seller’s market exists when the people who want to sell their home will likely have more negotiating power than people who wish to buy.  This means there are more people looking to buy than there are homes available.  

You can identify a seller's market because homes do not stay on the market for long, they are selling quickly and at or above the original listing price. There will also likely be fewer homes available on the market. 

A seller’s market can feel overwhelming for buyers, and perhaps a bit too tempting for sellers, so here are some tips on how to navigate it. 

Buying in a Seller’s Market  

It is always best in this situation to assume that you will not be the only person interested in a property, but there are a few steps you can take to set yourself up for success. 

When going against other purchasers, make yourself stand out by showing that you are financially able to ensure that the sale will procced to Settlement. Ensure that you have your preapproval and financial situation sorted and ready to go. 

Be aware that you have the disadvantage. When it comes to making an offer this may not be the best time to try to push with some contingencies, like specific Settlement date, inclusions or repairs. Focus your attention on what’s most important to you and if what you're asking is worth losing the home over.  

On the other hand, be patient as it can become very easy to settle over fear of missing out.  Some buyers will end up making offers on homes they otherwise wouldn’t be interested in because they’re tired of losing out. In the end it is still a very large investment and commitment to a mortgage and still needs serious consideration. 

Homes tend to not stay on the market long in a seller’s market, so it is best to keep a constant eye on what is happening and be ready to act when you see something you are interested in.

Selling in a Seller's Market 

It may seem like sellers don’t even need a sales strategy in a seller's market, however, if you want to get the best offer for your home there are a few things that you may want to consider doing.  

You still want to make sure that your home appeals to potential buyers, so have a look around  and think about what you need to do to get your home market ready. 

When determining a listing price, it may be tempting to go high because the market is strong. However, pricing your home at market value may be your best option. This does not necessarily mean you will not receive offers at more than the listing price. However, buyers can often be turned off by overpriced homes and financial institutions will reject mortgage applications if a valuation can’t financially support an overly high offer. 

Know how to choose the best offer. The highest offer and the one that will settle on time with minimal stress and without delay might not be the same one. Most of the time the best offer is going to be one with the strongest finances. Meaning that it is either largely cash backed with proof of funds or pre-approved buy with documented financing, even if it’s not the highest offer. 

What is a Buyer's Market? 

A buyer’s market exists when people who want to buy have more negotiating power than those that want to sell. 

In a buyer's market, there are more homes for sale than potential buyers. Homes will tend to sell slowly and at or below the listing price and there will be more available on the market and will give buyers more to choose from.

Buying in a Buyer’s Market  

As a buyer in a buyer’s market, it is a great time to buy. You will be able to take your time and there is no need to feel rushed to make an immediate offer. You can spend time researching comparable properties so you can be sure you are making a reasonable offer.  

Pay attention to days on the market. The longer a home has been on the market the more power you may have when it comes to making an offer.

Know what’s on the market. View as many properties as possible before making an offer. Seeing what is out there will ensure that you can be confident in the offer that you are making and in any negotiations that take place. 

Selling in a Buyer’s Market    

Before you list your home, spend some time doing research to see what other properties are on the market in your listing price range. Then think about what your home has to offer that is different to others on the market. Do you have a pool or recently made upgrades and renovations? This is your competitive advantage and what you can use to make it stand out from others. 

Feel like your home doesn't have a competitive advantage? You can create one. Help buyers picture themselves in your home. Declutter and put away your personal possessions and think about getting your home professionally staged. By doing this, you can create a blank slate for potential buyers to imagine themselves in your home. 

If you are a little uncertain about whether now is the best time for you to buy or sell, speak with one of the NXT GEN Property Agents. We are a locally owned and operated real estate with over 35 years of experience and local knowledge behind them. So not only do we know the industry, we also know the local Townsville property market.