Understanding a buyer’s market and a seller’s market

When it comes to buying or selling a home, the real estate market can feel pretty overwelming. The terms "buyer’s market" and "seller’s market" often come up, and knowing the difference can make a big impact on your strategy as a homebuyer or seller. Let’s break it down in simple terms.

What is a buyer’s market?

A buyer’s market happens when there are more homes for sale than buyers looking to purchase. In other words, it’s a market where supply exceeds demand. This creates favourable conditions for buyers because they have plenty of options to choose from, and sellers may be more willing to negotiate on price or offer incentives, like covering closing costs or making repairs.

Here’s what you can expect in a buyer’s market:

As a buyer in this type of market, you have the advantage. With less competition and more inventory, you can take your time making decisions and potentially get a better deal.

What is a seller’s market?

A seller’s market, on the other hand, occurs when there are more buyers than homes for sale. This means the demand for homes is higher than the supply, which puts sellers in the driver’s seat. Buyers often face multiple offers on the same home, sometimes bidding against one another to secure the property.

Here’s what you can expect in a seller’s market:

If you’re selling in a seller’s market, you’re in a strong position. There’s less need to negotiate, and your home is more likely to get multiple offers, which could drive up the final sale price.

How market conditions affect you as a buyer or seller

As a homebuyer, understanding whether you’re in a buyer’s or seller’s market will help you set expectations. In a buyer’s market, take your time and explore different properties. Don’t rush into offers, and don’t be afraid to ask for concessions. In a seller’s market, however, be prepared for a fast-paced environment and the possibility of bidding wars. You might need to act quickly, and you may have to offer above the asking price to secure your dream home.

As a homeseller, understanding the market gives you an edge. In a seller’s market, you can list your home at a higher price, and you’re less likely to face requests for repairs or price reductions. In a buyer’s market, pricing your home competitively and being willing to negotiate can help you stand out.

Whether you're buying or selling, understanding the dynamics of a buyer’s or seller’s market can help you make more informed decisions. By knowing what to expect, you can navigate the process better, whether you’re securing a great deal or maximising your sale price. Always stay informed and work with an experienced real estate agent and bond consultant to guide you through the market’s ever-changing landscape.